Economic and Financial Treaties; A Strategy in attracting Foreign Economic Values

Document Type : Original Article

Author

Associate Professor of the Department of Economics, Naragh Branch, Islamic Azad University, Naragh, Iran

Abstract

The present research was considered with the aim of investigating the interactions between the rigidity and Rigidity of Financial economic agreements, the instability of the political system, and the Ownership structure. Data related to economic activities in the year 2022 for the period 2019 to 2022 multinational companies with an average of 4 new foreign investments per year were selected and collected with a number of 116 and analyzed using paired logistic regression. The instability of the political system and the rigidity/strigency of Financial economic agreements in a non-interactive way did not have a significant effect on the choice of affiliated ownership, but in an interactive mode, with the increase in the instability of the political system, the economic and Financial /commercial agreements reversed the priorities of multinational companies in order to choose Majority ownership replaces minority ownership. At higher levels of instability of the political system, the more decisive rigidity of Financial economic agreements increases the possibility of increasing the choice of multinational companies from stocks. The rigidity of Financial economic agreements moderates the relationship between political system instability and the choice of affiliate ownership and encourages MNEs to choose majority rather than minority ownership. Finally, The multi-level nature of the environment of business economic activities shows that international multinational companies should consider different ownership arrangements under different conditions of instability of the political system, while balancing risks/risks and possible benefits. Strict economic and financial agreements are effective in providing a credible commitment against expropriation and providing a reassuring power that allows majority ownership by multinational corporations in host countries at higher levels of political system instability. Therefore, the design of a risk mitigation structure at the international level affects how firms view a potentially unstable environment at the national level.

Keywords

References

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Strategic Value Chain Management
Volume 1, Issue 3 - Serial Number 3
Research papers
December 2024
Pages 97-117

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History

  • Receive Date: 25 August 2024
  • Revise Date: 22 October 2024
  • Accept Date: 19 November 2024
  • Publish Date: 19 February 2025

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