Posted: March 6th, 2023

Understanding the various perspectives of international investors as well as the perspective of internationally active firms

International investors have a wide variety of motivations that can drive their actions when investing abroad. Those motivations will often reflect the investor’s own goals and objectives, which may include diversification of their portfolio into different markets, hedging against risks in the domestic markets, or simply trying to seek out higher returns than what can be achieved at home (Gomez-Mejia & Palich, 2020). Furthermore, international investors are also guided by their own risk tolerance as well as any legal or regulatory requirements related to investments made outside of their home country.

On the other hand, internationally active firms take on a much different perspective when it comes to investments abroad. For these firms, one primary motivation is typically rooted in strategic considerations such as seeking access to new markets and resources that cannot be found in the domestic market (Bebchuk et al., 2019). In some cases this may involve making an investment in another firm located within those foreign markets or even establishing wholly owned subsidiary operations for purposes of furthering the company’s global ambitions.

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Understanding the various perspectives of international investors as well as the perspective of internationally active firms

Furthermore, international firms must also consider not only traditional economic factors associated with potential investments but also geopolitical and institutional variables that could impact successful entry into new markets (Rodriguez & Singh 2011). This means they need to evaluate both government policies and regulations governing foreign direct investments along with legal systems which will determine whether contracts entered into between themselves and local partners will be enforced if disputes arise down the road. They must also factor in cultural differences that could potentially hinder effective management practices due to language barriers or divergent opinions on subjects like employee incentives or corporate governance standards.

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Finally, since international business takes place across borders there is always an added layer complexity associated with accounting principles applied by companies operating abroad (Abdolmohammadi & Seyedmahmoudi 2018). Companies need to be aware of how revenue generated from overseas operations is treated for tax purposes under each respective country’s laws so as not to run afoul with local authorities while still obtaining optimal benefits from their activities throughout multiple jurisdictions.

In conclusion its clear international investors tend focus more on financial returns when compared internationally active businesses who look beyond dollars signs when considering foreign opportunities; taking into account both macroeconomic factors along with geopolitics reality’s thereby creating unique set of challenges for both parties (Gomez-Mejia & Palich 2020; Bebchuk et al., 2019; Rodriguez & Singh 2011; Abdolmohammadi & Seyedmahmoudi 2018).

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