How sovereign nation bankruptcies differ from private company Essay

How sovereign nation bankruptcies differ from private company bankruptcies, and does a default on domestic debt differ from a default on foreign debt - Essay Example 86). Consider the way that the British defaulted on war debts to the Americans (Mead, 2002). Most of the industrialized nations have defaulted on debt. Spain defaulted thirteen times over four centuries! Indeed, â€Å"French finance minister Abbe Terray... even opined that governments should default at least once every hundred years†... (Reinhart and Rogoff, 2009, p. 87). This indicates two things about public debt. First of all: Default on public debt is nearly omnipresent. This is because the debtors in question are themselves likely to be permanent institutions, based on the logic of the European nation-state system, and are borrowing from other states, who are also permanent institutions. Yet the defaulting rate on private loans is nowhere near 100%. Second, enforcement of public debt is highly politicized and uneven. Britains war debts were excused; Germanys werent (Mead, 2002). Most private debt is treated relatively evenly: One is loaned money and one has to pay it back, no matter who one is. We can also see from this that this uneven enforcement can give countries an incentive to default that is not present in the domestic economy. It is hard to enforce across country lines. And, of course, the access to enforcement varies. If the US defaulted on a loan to China, they could use their military power to prevent enforcement. If Nigeria defaulted on a loan to the United States, the matter would be entirely different. Another difference is that, while private debt is based on an individual familys economic situations or the micro-economy of a region, public debt is often based on entire market institutions and trends ( Reinhart and Rogoff, 2009, p. 87-89). Capital inflows or growth often precede defaults, due to large amounts of debt being taken on due to the belief that â€Å"this time will be different†. Individual families or companies do not tend to behave this way. Countries do. Since 1800, public debt

Case Study International Business Essay Example | Topics and Well Written Essays - 500 words

Case Study International Business - Essay Example int in time, the only way of achieving such a goal was to integrate with the market in the same way that IBM was operating within the domestic market. One of the main reasons for why this classical approach was no longer working for IBM as soon as the early 1990s had to do with the fact that the world was becoming increasingly globalized. In addition to the collapse of the Soviet Union, the interaction and integration between economies and business entities throughout the world had been on a dramatic increase; so much so that continuing to operate by the classical model with no longer yield the same level of profitability that IBM had been able to appreciate in the past. Naturally, in order to survive in this new climate change, IBM saw it necessary to integrate a more global Outlook. In much the same way that certain businesses fail due to the fact that they are not able to change with the times, IBM’s on the necessity of change and instantly integrated with it so that the risk of not changing could be ameliorated. The first and most obvious strategic advantage to IBM of globally integrating its strategy has to do with the fact that it will be able to take advantage of the unique aspects that certain markets exhibit. For instance, within China, a relatively low cost level of production has been established. By means of comparison and contrast, expertise and development has been created within India. By utilizing these unique realities within the global market, IBM’s strategy can be more closely honed to the expertise that it can draw from as well as the unique dynamics and demands of its consumer base. From an analysis of the framework, it is clear and apparent that IBM is wholeheartedly pursuing a level of diversification, change, globalization, and development. Even though the industry could clearly be categorized as an established firm that has been able to accrue a wide level of profitability from various consumers in the past, it understood the fact