the growth in global business and describes a framework for future activities aimed at reaching a shared understanding of the rights and responsibilities of MNCs in an age of technological interdependence.

FIGURE 2-2 Outward foreign direct investment stock. SOURCE: United Nations Conference on Trade and Development, World Investment Report 1995.NOTE: Amounts for 1994 are estimated.

  • Global political, economic, and technological trends promise opportunities for growth in international business on a scale that is, perhaps, unprecedented.

The end of the Cold War, the dynamism of East Asia, and the emergence of new market economies means an improving political economy for global business. The dissolution of the Soviet Union and the end of the Cold War are, of course, geopolitical developments of profound importance. Although experts differ on the ultimate direction of political and economic changes, there is reason to hope that the relaxation of Cold War tensions will contribute to a more positive international environment for investment and long-term economic growth.

Even before the collapse of communism in Eastern and Central Europe, the trend of nations around the world has been toward market-oriented economic policies. The market-oriented East Asian economies have set the pace over the past several decades and, despite current difficulties, it is likely that economic growth will continue in the Asia Pacific region. China's economic growth has been conspicuous recently, but reforms have been implemented in India and a number of Latin American nations as well. As illustrated by the economic upheavals in Mexico in 1994 and 1995, transition to more open market systems continues to raise its own challenges for individual countries and international institutions. Progress is likely to be uneven, as explained in more detail below. Still, the overall trend remains powerful: emerging market economies in Europe, Asia, Latin America, and Africa have strong incentives to seek greater integration into the world economy.

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