1. What is the relationship between property rights and economic development?

Property rights are one of the major factors that influence economic development, that is because a land with
no official ownership brings uncertainty to both the one who uses it and to the organisations that view it as an
asset, in reality being a liability. A property can bring lots advantages to its owner, for example if he is
planning to open a start-up business he will need money thus use it as a source. It could help a certain county
to raise the number of entrepreneurs which will have a positive effect. This is why in countries like USA the
percentage of property rights is high and the number of new business is always high.

2. Why is it important to understand formal institutions before entering a coun- try? Explain by using
an example.

Formal institutions, meaning laws, regulations and rules, are absolute when it comes to responding to them,
there is no escape for no one, thus it would be a fatal blow if a company couldn't comply to the law, even
though it has made huge investments. For instance Coca-cola had to leave India because it couldn't fulfil one
of the government's rules, this resulting in a negative impact on the company.

2. How does democracy suffer from severe set- backs in some countries lately?

One major setback in European democratic countries is the establishment of euro, which cannot be
considered a democratic way of doing thing as only 2 countries tried doing it through voting methods. This
made the people pay higher taxes for something they didn't want.

3. How does the Chinese experience answer the question: “Is democracy good for economic development?”?

Although democracies can be good for economic development, same can be said about totalitarianism, but
only in rare cases. China is the fastest-growing major economy in the last 30 years, proving that this regime
can also be good for economic development. Moreover people are more satisfied with were the economy of
the country is headed (85%), compared to other big economies: America and Europe(30%)

4. ON ETHICS: The military governments in Egypt and Thailand have invited your firm to do business
there. As CEO, you appreciate the lucrative offers. But you are also concerned that your firm may be labeled
“devil’s advocate” or “accomplice” by democracy activists around the world. How would you proceed?

Rejecting this proposal, would be the best option as Egypt and Thailand are non-democratic countries, which
creates uncertainty. Moreover it is less likely that the business will be successful in an environment ruled by
a military government. The risk is higher when having a business in an area of unknown institutional
framework.

5. What are the pros and cons of doing business in a culture characterized as collectivist?

The pros of doing business in a collectivist culture would be that the people are more collaborative and less
opportunistic when dealing with people from their own group, thus it makes a team more effective
and hardworking. However a cons for doing business in collectivist countries is that they don't
tolerate those who are outside of the group, making them more opportunistic and less trustworthy.
The attitude showed to out-group members, would be to get as far as possible from them and they
are considered to be somewhat dangerous.

6. Indicate how your country generally fits in each of Hofstede's dimensions.

In my country, Moldova, the following dimensions have a high score: Power distance, uncertainty avoidance
and long term orientation and the low scores are represented by Individualism and masculinity .