American History

Foreign investment in socialization is the placement of long-term capital in some part of the world, for the creation of agricultural, industrial and service companies, in order to internationalize.

1.- Economic growth of the country.

The first data that must be analyzed is the expectation of GDP growth in the coming years of each of the countries in which there is interest. A growing and sustained demand will facilitate access to the market and will make profitable the investments that are made.

2.- Purchasing power per capita.

A figure that also conditions the demand is the level of income of each country and that is measured by the parity of purchasing power per capita (PPA). This concept, which is expressed in US dollars, includes not only the production of goods and services of a country, but also the price level and the evolution of the exchange rate of its currency; so it is the best example of the purchasing power of the inhabitants of a country.

3.- Volume of imports.

An essential criterion for choosing a target market is the country's imports of the products sold by the company: the volume of imports is the figure that best reflects the size of the market. To know what imports and exports a country of each product must first identify the tariff code.

4.- Growth of imports.

As important as the volume of imports is its evolution. The last three years must be analyzed and the average annual growth of that period calculated. A high average annual growth (above 10%) indicates that the country increasingly imports this product and, therefore, there is a growing demand. On the contrary, if the growth is reduced (below 3%), or even there is a decrease in imports, it will be an unfavorable indicator to choose that country.

5.- Exports from the country of the company.

An important criterion to evaluate the potential of the market is the exports of the product from the country of the company to the country under analysis. This criterion should be assessed both by the volume and growth of exports in the last three years. Indicate that products from the country are increasingly recognized and have greater acceptance.

Criteria to assess accessibility and risk.

6.- Tariff barriers.

The tariffs are taxes on the import of products that are applied in the customs of entry in the countries, for what suppose a direct increase on the price of the product and, with this, a lower competitiveness of the products of import in front of the products local. As a guideline, it can be said that for tariffs to be considered a significant barrier, they must be higher than 5% in industrial products and 10% in consumer products.