BEHAVIORAL ECONOMIC FORCES

REPORTER: PATRICIA FELIX

BSBA – HRDM 2-1N

ECONOMIC FACTORS

• Explains the differences among

countries in terms of costs,
currency values and market size.
BEHAVIORAL FACTORS

• In a foreign unknown surrounding,

the related studies like anthropology,
psychology and sociology assists the
business to have a better
understanding of values, attitudes and
beliefs.
 Can be classified into three categories:

ECONOMIC 1. Economy in the home country

ENVIRONMENT 2. Economy in the host country

3. Economy at the global level

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 1.) HOME COUNTRY ECONOMY

• In order to encourage the business community to

venture overseas, it is necessary for a country to
have a liberal economic and trade policies.
 A.) Economic Policies

• Countries economic policies

are formulated and the
targets are fixed looking at
the business opportunities in
the countries.
B.) Trade and Commercial Policies

• Trade policy is announced by the

ministry of commerce and industry and
the target for rational foreign trade is
fixed. Many incentives are held out to
overseas companies, so that they set up
operations in the home country through
local partners to promote their nationals.
C.) Promotion and Regulatory Measures

• Home country should take the

opportunity to do business
abroad. It can do this by being
proactive, encouraging persons
to take risks and extending fiscal
and promotional support.
 2.) HOST COUNTRY ECONOMY

• When a firm from one country enters any other

country, the following major criteria are taken into
account:
A.) Size of the market

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 B.) Gross Domestic
Product (GDP)

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 C.) Industrialization

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 D.) Banking

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E.) Purchasing Power

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F.) Foreign Exchange

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G.) Income Levels
H.) Economic
Diversity
3.) ECONOMY AT A GLOBAL LEVEL

• World Trade Organization, World Bank, International

Monetary Fund, Asian development bank and the
organization of petroleum exporting countries can
affect international business.