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Analysis of a country for direct foreign investment from Canada

Home Free essays Analysis Analysis of a country for direct foreign investment from Canada

Mexico covers approximately 761,606 square miles of the geographical area. It forms boundaries with the United States of America to the north, with the Gulf of Mexico to the east and with the pacific ocean to the west. Moreover, it forms boundaries with the Guatemala to the south. This shows that the country is bounded by the great world economies making it a better hub for foreign investment. The countrys situational structure gives it an easy mode of access, while the western part of the country serves as a hinterland, where it is bordered with the Pacific Ocean. This situational location gives it a preview to suitability for foreign investment including prospective Canadian investors.

The country is well versed with resources that span from 20% exports in capital goods and a whooping 70% of manufactured metal goods. The country has a link for auto export business ventures with the US with low incentive goods that require low technological labor. The impact of such exports on the United States is that it has resulted to a gross domestic product increase of 5.5 % annually . This shows that the country has a well planned structure in terms of wealth, while technological advancement is set to increase in the coming years to advance the forms of production from manual to technological.

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For expansion within the business world, a company must be tied to external forces of drive that forms sources of raw materials and market expansion for goods. Mexico has direct trade links with its neighbors especially the United States of America and Belize, which form the entry port for manufactured goods. Moreover, Guatemala bordering to the south forms a part of market sources and source of raw materials for the manufacture industry, where there exists a form of business collaboration fro these neighboring countries for free trade at individual country borders. This has helped in cropping up of trans-border booming blocs .

The vital industries that are operational in Mexico are the assembling car industries like the GM, which is Americas biggest auto industry. The automotive industry has formed a close attraction for foreign investment, while the manufacturing industries that are suitable performers are pharmaceutical industries that manufacture vitamins providing the country with vast diversification modes. This has impacted. The country is evidently a low-tech labor intensive hub, where the metal industry forms the back born of the industrial platforms, although most of the production industries are foreign owned in liaison with the government with the exception of industries for import of finished products .

NAFTA is a multinational company that is operational in the assembly industry while the 3M Mexico is operationalized for uninterrupted foreign investment, where it deals with expansion ventures in the business world through sourcing for potential harbors for investment within and without the country. This implies that it gives guidelines for different prospective investors in the operational culture within and outside the border of Mexico, where it is expanding to foreign lands like the US. On the other hand, NAFTA is a hub for strengthening of the economic expansion since it forms a supervisory role in the economic expansion for the corporate members.

The country has a huge potential of market prospects with a high population that forms internal market prospects. This stability in the market is also a factor that has seen increased foreign investment. Moreover, the fact that it is bordered to the potential economies like the US, means that the country is well versed in terms of market for goods. The forms of stipulations from the Mexican government through legislation for no importation on finished goods also gives the sense of reality in foreign markets since the country is well versed with the exportation system for finished products, which gives room for those with investment prospects .

In terms of infrastructure, the country is well served with connection links especially services by air and land in the north, which is served with state of the air transportation systems. Moreover, the country is served by a hinterland, which forms a port town to the west with the Pacific Ocean. This offers accessibility by water transport with facilitation of programs for transport of goods to the outside market without increased cost of production. Overly, the channels for connection of Mexico with the outside world are vast and rich elements of transport systems that are used for transportation of finished goods .

Political stability forms a factor of attraction of foreign investment where a threat to security systems hampers the process of expatriation. In the past 20th century, the country was marred by political instability, where the social systems that could eliminate the vice were the advocacies through participation in direct corrupt activities and poor legislative roles. This has affected performance of Mexico in terms of political stability. The country is a potential source of the insecurity due to poor judicial systems that are easily swayed and compromised by practices of corruption, which stem from poor legislations .

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The banking systems on the other hand are protected from cases of fraud through technological monitoring of performance. Even through the country faces the threats of increased crime emanating from drug related prospects, the banking systems are legislated and protected by the central government for cases of fraud, which puts the stability at an average point of intersection between being good and worse. For starters, this system is rigorous since the required norm of the increased crime and fraud cases at the banking systems cannot be bearable. However, with continued ventures, the investors get insured to these systems to become profound beneficiaries of the vice.

The monetary policy and consequent control of inflation rates are the sole mandate of the central bank, which regulates the supply of currencies and control of rates of tariffs to attain the most desired outcomes, so that there is reduced chances of inflation while the exchange rate tariffs are stable . The forms of legislation from the central bank of Mexico assume power to control cash flow and barriers to trade like the weakening of currency . This gives a sound platform for foreign investment bearing in mind that the best outcomes would be determined by these inflation rates that have systems of control.

The social stability within the country is a mystery, where there exists a long-lived culture of social instability. The crime rates in the country are high probably due to the high intake of intravenous drugs. The level of competence of legislation systems is low, putting Mexico in the level of one of the most insecure countries on the globe. Moreover, the social way of injustices has taken root to the level of increased numbers of broad daylight muggers in the main streets of the capital, which puts the need for caution.

The importance of acculturation in the expatriation process is clearly defined as a factor underpinning foreign endeavors. The culture of Mexico includes a mixture of communities, which eliminate chances of alienation to cultural objectives. Most of the people living in the country are prospective businessmen and women from all over the sphere of the world, a factor that has accelerated assimilation of new culture and elimination of cultural affiliations. This implies that the country is culturally dynamic, giving it its role as a potential harbor for acculturation process because it is not inclined to one form of culture .

The important form of legislation affecting foreign investment in the country stipulates that the country does not deal with importation of finished products. This reduces the viability of the resources for investment since investors are only inclined to deal with unfinished products that provide employment to the locals; however, this is not a setback in the investment industry since the existing form of business prospects is working under these stringent constraints. Moreover, dealings with unfinished products increase the resource capabilities as a result of low tax incentives vested towards such business endeavors. This shows that an investor should be resilient to bend to the jurisdiction of this culture.

Moreover, the ratification of the North America free trade in 1994 was influential in the development of international relations in terms of businesses in Mexico. This form of legislation is evidently the most important factor for achievement of trade agreements aimed at cordial border business prospects that reduce external aggression and conflicts of interest over the control of border points. The external agreements are also influential in extinction of intercultural barriers since it has effectively raised the country from a hub of alienated culture systems to a potential country with diversified cultural prospects especially in terms of probable business ends.

Conclusively, the natural factors mentioned for the suitability of Mexico for foreign investment are bound to stay redefined by the legislative roles of the central government. This shows that for a potential investor especially one from Canada, eventually criteria is philosophical. This implies that Mexico is both a potential harbor for investment and a source of political instability due to poor legislation systems. Therefore it is the duty of the investor to analyze the factors that are beneficial to them in order to avoid blame games synthesized by this article. It only calls for resilience.

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