The Effects of Different Structures on Ownership Decisions Essay

The Effects of Different Structures on Ownership Decisions - Essay Example Joint ventures have to be applied in countries where foreign ownership is restricted. Other forms of entry into overseas market are mergers and acquisitions. A merger occurs when an exporter merges with a local company and creates a new unit, while under acquisition the exporting company takes over a domestic company. This research aims to asses the effect of different structures on ownership decisions. According to Raff, Ryan and Stahler (2005), direct exports or Greenfield investment does not change the ownership as it relies on its own assets to produce goods. In the case of M&A the foreign firm acquires the assets of the local target firm and combines them with its own assets but in the case of joint ventures, even though the assets are shared, they continue to choose output independently. Thus the decision to invest in another country would depend upon the extent of investment that the host firm wants to make. This implies that the firm heterogeneity would determine the pattern of foreign direct investment. Research suggests that firms with least assets would not like to disturb the ownership and would prefer to directly export their goods. Firms with highest assets choose Greenfield or direct investment. Those with low assets prefer mergers and joint ventures. Kasuga (2003) clarifies that net worth plays an important role in determining structures and hence the ownership decisions. When the minimum efficient scale for foreign companies is too large, the host firm chooses joint ventures or equity participation rather than wholly owned subsidiaries. The ownership decisions are based on various micro and macro factors as it depends on the host country for support. When the parent firm needs the local partner’s assets, joint venture are preferred. The ownership shares and consequently the profits too get distributed in case of joint ventures. The ownership also affects the degree of technology transfer from the parent firm. Research also shows

Water Contamination Assignment Example | Topics and Well Written Essays - 500 words

Water Contamination - Assignment Example Farms do two things to chicken manure: dump it in any available water resource or use it on the fields. Pohlmann decided to 14.1 tons of land-applied manure to one acre. This was done despite the recommendation limiting manure to six tons per acre (Rish). According to the Natural Resources Defense Council, Ohio has no Clean Water Act permits that specify control over livestock operations like Buckeye’s chicken farm. Also, Ohio’s Trade Secrecy act permits factories like the Buckeye farm to dump their manure in an off-site location without revealing the area. However, it is not the manure spill alone that affects the poison content of the water. The intensive confinement of thousands of chickens can result in manure that is far beyond the soil’s absorption rate. The runoff that results from this heavy manure can cause not only water pollution but also affect the land. In the water, it causes eutrophication which makes the soil so rich in organic and mineral content that the amount of oxygen in the water is depleted (HSUS 2005). The difference is that while the plants in the water thrive, the animal life in the water body suffers. This contamination is not a problem for the land and animals alone. The polluted water that drains into the rivers is a percentage of the drinking water for the humans in that area. Grant claims that 60% of the water dumped into these rivers is used as drinking water by the locals of Ohio (1998). Thus, Buckeye farm profited from a number of loopholes in Ohio’s state program. The farm was not forced to reveal the places it dumped the manure preventing the citizens from knowing if the manure is not being properly disposed of in streams or wells. Ohio’s environmental body also has the permission to ask for the management of livestock manure if any farm has more than 1000 livestock units: like the Buckeye Farm.