Reasons Why Companies Retreat to Domestic Countries: Globalization

Why Companies Retreat to Domestic Countries

Reasons for firm’s retreat to a domestic focus
Government encourages home grown firms to invest in their country. A firm may embark on domestic focus due to the following
Favourable business environment
When the business environment is the home country are more favourable than the foreign country where the firm has been operating, such an investor finds its prudent to retreat to a domestic focus. For instance, when the dormant domestic market starts to improve or more expertise available than before at affordable market rates.
Some Firms go back to their origin countries because of Political stability
A country with stable political environment attracts back investors who had initially ran away due to the prevailing risk of doing business in political volatile environment. Political instability in a foreign country may also make a firm to retreat.
More government incentives
The government may give local firms incentives to encourage domestic production. For example the government of Kenya established the export production zones (EPZ), in order to encourage manufacturing industries being established in the country.
Unfavourable competition from other multinationals
When a firm cannot compete favourably abroad, it may retreat to establish itself in home country. Reduced returns, poor business conditions and depletion of sources of law materials through competition may trigger such a move.
Description of Bill of lading as an import document
This is a document issued by the carrier or the transporting company to the shipper to acknowledge the receipt of goods for shipment. Other features that are indicated to the shipper (someone who packages, labels and prepare goods for shipment) in this import document include terms of transportation, description of the specific shipping vessel and the destination of the goods in transit.

References on International Finance and Business Locations

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Leve, M. D. (2005). International finance. Oxon: Routledge.
Mohapatra, A.K.d. (2007). International accounting. New Delhi: Asoke K. Ghosh.
Moosa, I. A. (2002). Foreign direct investment: Theory, evidence and practice. Hampshire: Palgrave