Business Management Assignment: How International Finance Impact Business during COVID-19?
Question
Task:
Choose an article “Foreign direct investment and economic growth in Latin America” by Rafael Alvarado , María Iñiguez , Pablo Ponce and write a business management assignment presenting a detailed article review.
Answer
Abstract
As per the research on business management assignment, the network perspective stated that the insidership in the foreign market network is crucial for the internationalization process. This study also considers the role of home network insidership in the FDI depending on the individual and the joint effects of the network attributes. In this study, data will be collected from the 357 Chinese firms with 194 valid data where the response rate is 54.3%. The data will be carried out through online surveys and face-to-face surveys. The results and the findings of the study stated that the dynamic effect of insidership in the home networks is effective with the association of the OFDI. The Chinese firms are generally considered to be in the central position of the business network thereby assisting in the development of close relations with the domestic firm.
Vietnam, a highly vulnerable country with limited healthcare facilities and a dense urban population can be considered to be successful in fighting against the pandemic. This study will carry out a cross-sectional survey among the 672 countries in Vietnam where the logistic regressions will be utilized to carry out the coping strategy. The companies must select the cost-cutting strategies based on financial distress and the other related entrepreneurial factors. The findings of the study highlighted that the perceptions of the managers linked with the spillover effect of global risks can affect the companies more than the local risks.
1.0 Introduction
International finance can be considered as the crucial tool for the determination of the exchange rate, the comparison of the inflation rate as well as to receive an idea on the investment in the international debt securities market analyzing the economic status of the country (Du et al., 2020). Foreign Direct Investment (FDI) can be considered to be an important investment that is carried out by individuals or firms in carrying out the business interests (Nguyen et al., 2021).
1.1 Purpose
The purpose of this study is to analyze the role of varied entrepreneurial factors, the financial performances, and the coping strategy that is required for the companies to survive during the COVID-19 pandemic. Further, it will also discuss the effect of varied home network attributes in conducting outward investment in the country.
1.2 Chosen Article Details
The article published by Du et al. (2020) has been published in the International Business Review. On the other hand, the article published by Nguyen et al. (2021) has published an article in the Research in International Business and Finance.
2.0 Summary and Analysis
2.1 Summary of Article 1
Du et al. (2020) has highlighted the insidership in the home market. It has been found that the effect of different types of home network insidership that lays effect on the FDI can be linked to the individual and the joint factors of the structural and the relational attributes. According to the network view of internationalization, the contextual aspects play an important role in the positioning of the firm in line with the other countries. The varied underdeveloped institutions generally rely on the guanxi relations for mitigating the risks. On the other hand, it has been found that varied empirical studies have highlighted the positive effect of the network structure as well as the relations based on the internationalization of the firm.
Findings of the study
In this study, the author has also carried out an analysis of the relational and the structural attributes of the FDI so that it becomes easier to determine the position of the firm. With the help of these structural attributes, the focal firms can develop strategic resources that assist in the internationalization activities. Brokerage and centrality are also considered to be the vital attributes affecting internationalization activities. The exists linkage between the relational and the structural network attributes so that it becomes easier to carry out the exchange relations. There exists a connection of the FIEs with the home business network and this is found to lay positive and negative effects on the position of the firm.
2.2 Summary of Article 2
The article published by Nguyen et al. (2021) has opined that the organization generally uses cost-cutting strategies to tackle the economic shutdown. This shutdown policy played a crucial role in the control of COVID-19 especially by the Vietnam government that has gained positive appraisals from varied government companies. The effect of the COVID-19 pandemic has laid both demand and supply shocks in the economy and thus there have been slumps in the industrial and consumer disruptions and spending. Different challenges were also encountered by the business organizations operating in the Vietnamese sector and thus there remains a critical chance of the risk management program that is crucial for the smooth functioning of the companies. The organizations that are operating in Vietnam have also tried to develop response strategies to tackle the crisis.
Findings of the study
In this study, the author has also tried to highlight the findings of the logistic regression that lays a crucial effect on the selection of the cost-cutting strategies. The varied types of financial factors lay distinctive effects on managing the growth-focused strategy rather than the selection of the cost-cutting strategy. There have been careful attempts made in analyzing the entrepreneurial and the financial decisions laying effect on the cost-cutting strategies. The regression results have also laid robustness in tackling the entrepreneurial and financial factors and thus this can be considered to be essential for the development of growth-focused strategies.
2.3 Strength and Weakness analysis of Article 1
The strength of the article published by Du et al. (2020) includes the role and the effect of the home business network that plays a crucial role in the generation of the business advantage. This article has also highlighted the importance of network insidership in the home and the foreign countries. Moreover, the outward effect of the investor's point can also be considered to be essential for the evaluation of complex mechanisms.
Du et al. (2020) has failed to highlight how the home networks insider relationship affects the competitive advantage of the OFDI. This has also affected the network performance, trust-building, relationship management, and the time-dependence factor to a great extent. It has also become difficult to establish the connection between the firms and thus overcome them for completing the task on time.
Strength and Weakness analysis of Article 2
The strength of the article published by Nguyen et al. (2021) is the analysis of the entrepreneurial and the financial factors on the development of different types of coping strategies. The perceptions of the managers in tackling the global risk of the COVID-19 pandemic on the Vietnamese companies have been linked to the spillover effect and thus the managers have laid a response.
Nguyen et al. (2021) have depicted biasness risks in the samples. This has made it difficult for the companies to mitigate the issues and thus it has also become difficult for the companies to assess the coping strategies linked with the selected aspect. The biasness risk in the samples if it is unaccounted might erroneously affect the phenomena under study rather than carrying out the study.
3.0 Conclusion and Recommendation
Thus, it can be said that the effect of COVID-19 on the financial operation of the organizations in Vietnam and the coping strategies has been discussed in the study. Further, the effect and the role of the home business network on the OFDI have also been taken into consideration.
The research carried out by Du et al. (2020) can be improved through development of a strategic OFDI with different types of approaches to tackle the contextual obstacles. This will make it easier for the companies to enjoy the different types of attributes that can be prioritized based on the financial and the structural OFDI support. On the other hand, the research carried out by Nguyen et al. (2021) can be improved through carrying out careful attempts in carrying out the analysis of the complex interactions such as the selection of strategy. Moreover, the methodologies are also to be investigated for carrying out the cross-disciplinary research.
4.0 References
Du, J., Xu, Y., Vos, H. and Wang, S., 2020. The impact of home business network attributes on Chinese outward foreign direct investment. International Business Review, p.101779.
Nguyen, H.H., Ngo, V.M. and Tran, A.N.T., 2021. Financial performances, entrepreneurial factors and coping strategy to survive in the COVID-19 pandemic: the case of Vietnam. Research in International Business and Finance, 56, p.101380.
