Global Financial Management

Wanita Jones-Lott

September 2, 2012

Unit1 Individual Project

FIN630-1204A-01

Professor: Al Siu

Abstract

This paper talks about two different countries which is France and Mexico in order to find out which one would better for a Greenfield expansion. This comparison discusses both countries trade policies, economic backgrounds, social and cultural differences, currencies and current political situations.

Greenfield ventures the form of a strategy in a foreign direct investment where the company's focus is to enter a new market without the help of another business who is already well established in the market. This type of strategy requires the construction of new operational facilities that will create new jobs. The creation of these new jobs includes complete business operation, from the ground up, where none existed before. A Greenfield strategy is the complete opposite of an acquisition or a "brown field" investment.

Many firms have managed to enter the international market by either acquisitions or thru Greenfield investments. I have selected the Republic of Mexico and The French Republic to evaluate, compare and contrast the advantages and disadvantages around being the potential sites for this Greenfield venture. France is a member of the European Union and Mexico is a low key self-governing country that is not associated with the European Union. This paper will also discuss the trade policies, economic background, social and cultural differences, currencies and current political state of affairs that could impact the production process.

Trade Policies: European Commission vs. NAFTA

France is the 8th largest trading partner of the United States, according to the United States Census Bureau Trade and is accumulating 65.6 billions of dollars in total trade which include exports and imports for the year 2010. As a member of the European Union, France is compelled to abide by...