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International Economics

In Multinational Enterprise and Economic Analysis, R.E. Caves analyzes the world of international relationships and how these relationships and business shape each other. Modern businesses stand in the middle between following government policies and developing those policies. The same can be said for public perception. The effective business reacts to and shapes public perception. This becomes more important when looking at multinational businesses.

Perceptions, policies, and regulations around the world all intertwine effecting businesses. Those who have a presence in more than one environment can draw on that experience to take maximum advantage of their power.

Multinational enterprises are joining together to transform the latter part of the twentieth century into a trade and business network such as has never existed at any other time in history. Factors such as the Asia-Pacific Economic Cooperation forum (APEC) and the North American Free Trade Agreement (NAFTA) have joined the world together in way that it has never been joined before. Caves points out that these factors and the transformations occurring are the result of a strategic effort by multinational enterprises to shape governmental policy and public perception.

Looking specifically at NAFTA we see only one small percentage of the business transformations which are occurring around the world. This view is a valuable one indeed because although it shows only a small picture, that small picture is part of the whole. By reducing or limiting trade barriers, this agreement has bolstered business activity between the United States and Latin American countries. In certain geographic areas these countries are adopting each others characteristics.

Business has shaped even international agreements as weighty as the North American Free Trade Agreement. This agreement was orchestrated largely though the strategic actions of multinational enterprises. Also look more about Latin America on my site.

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