International Financial Market
American Intercontinental University
Unit 1 Individual Project
FIN630 International Financial Markets
April 5, 2013
ABSTRACT
This paper will discuss the advantages and disadvantages of starting a Greenfield Production Facility in one of two places Estonia or Turkey. The paper will then conclude with my recommendation to Acme as to which foreign country is best suited for their investment.
International Financial Market
As a multinational enterprise that is considering establishing a Greenfield Production Facility in or outside the European Union will represent a major investment in the chosen region. When considering a potential country make sure that the production facility space will encompass manufacturing as well as office space as to create as many new jobs as possible for the region’s economy. With that said the two proposed foreign countries to choose from will be Estonia a member of the European Union and Turkey a non-member of the European Union.
Currency of Estonia and Turkey
Estonia is the most northern Baltic State and a member of the European Union as of 2011 it has used the Euro as its form of currency (Europea.eu, n.d.). As with any currency there are advantages and disadvantages. In this case the largest advantage of the Euro is this form of currency is the only form of currency utilized between the 17 of the 27 countries that make up the European Union. This means that the need for an exchange of currency between the 17 members has been removed. This brought on another great advantage which is no need for an exchange rate between the members. This alone cut down on high interest rates and inflation brought on by exchange rates.
The disadvantages of Estonia and the other 16 members of the European Union sharing Estonia’s Euro as one currency is they are no longer able to alter or adjust economic and monetary policies to remove any economic declines in their individual country. In this disadvantage also comes the
Unit 1 Individual Project
FIN630 International Financial Markets
April 5, 2013
ABSTRACT
This paper will discuss the advantages and disadvantages of starting a Greenfield Production Facility in one of two places Estonia or Turkey. The paper will then conclude with my recommendation to Acme as to which foreign country is best suited for their investment.
International Financial Market
As a multinational enterprise that is considering establishing a Greenfield Production Facility in or outside the European Union will represent a major investment in the chosen region. When considering a potential country make sure that the production facility space will encompass manufacturing as well as office space as to create as many new jobs as possible for the region’s economy. With that said the two proposed foreign countries to choose from will be Estonia a member of the European Union and Turkey a non-member of the European Union.
Currency of Estonia and Turkey
Estonia is the most northern Baltic State and a member of the European Union as of 2011 it has used the Euro as its form of currency (Europea.eu, n.d.). As with any currency there are advantages and disadvantages. In this case the largest advantage of the Euro is this form of currency is the only form of currency utilized between the 17 of the 27 countries that make up the European Union. This means that the need for an exchange of currency between the 17 members has been removed. This brought on another great advantage which is no need for an exchange rate between the members. This alone cut down on high interest rates and inflation brought on by exchange rates.
The disadvantages of Estonia and the other 16 members of the European Union sharing Estonia’s Euro as one currency is they are no longer able to alter or adjust economic and monetary policies to remove any economic declines in their individual country. In this disadvantage also comes the