international expansion of the local firms
One of the best ways for the international expansion of the local firms is through acquiring foreign companies where the benefits include expansion of the market share. However, international investment is more risky than the domestic trades. Through foreign trade the seller and the buyer usually do not come into contact and sometimes the buyer who might not be creditworthy, after receiving the goods may not pay immediately. Sometimes the goods are not paid and the seller incurs losses since there no legal actions can be taken against the buyer. Political and economic instability poses a great risk to the international business and below are the differences between the two, how they affect the foreign investments, how they may benefit the economy of the host country as well as the demerits of foreign investments.
Yusof, Y. (2007). Managing Financial Risks for Multinational Companies in South East Asia. Avebury Boulevard: Author House Publishers.