Global business contains transactions developed and implemented across international borders to meet objectives of those with a vested interest. The primary transactions are import, export and foreign direct investment (FDI). FDI is organizations taking part in a joint venture, licensing or franchising. There are many factors to be considered when conducting international business. To do this correctly, an analysis must be performed. I will define regional integration as well as discuss its role in promoting global business. The geographical region of Southeast Asia will be the area of focus and a discussion will be held on the advantages and disadvantages of the Association of Southeast Asian Nations (ASEAN) on regional integration. Finally, I will compare and contrast the economic development stages of the countries within this region and the effect of economic development in global business.
Regional integration is an agreement between countries within a specific region to reduce tariff and non-tariff barriers (Hill, 2004).
Eliminating these barriers will promote the flow of goods, services and production between them. Regional integration promotes global business by building a relationship between countries within a specific region to develop economic and social strategies as well trade policies. The capacity to accelerate and strengthen economic, social and cultural ties between countries is what makes regional integration so important. These agreements are designed for all member countries to encourage free trade within their region.
There are many advantages and disadvantages to regional integration. An advantage is the ability to establish free and open trade. Free trade helps economic growth, produces jobs and offers further opportunities for trade and investment. Free trade lowers the costs of production thereby reducing the price of goods and services. Regional integration also forms larger markets allowing economies of scale, increased competition and foreign investment. Integration also accelerates the...