The Impact of Global Economic Policy on Corporate Internationalization Pathways: A Comprehensive Analysis of Trade Agreements, Exchange Rate Fluctuations, and Import-Export Restrictions

This article outlines the effects of global economic policy on corporate internationalization, with an emphasis on trade agreements, exchange rates and import-export controls. In using a representative sample of MNCs in multiple industries, this paper employs a quantitative framework to investigate how such policy considerations influence firms market entry decisions and use of resources. Findings show that trade agreements tend to make it extremely tempting for firms to use high-capital entry channels like FDI, by minimising tariffs and standardizing rules. Conversely, exchange rate volatility pushes firms towards low-capital activities such as exports in order to offset currency risks. Additionally, strict import-export regulations force firms to respond by manufacturing in-house or domestically sourcing inputs, thereby altering competitive positioning. These studies offer useful insight into the complicated connection between global economic policy and international business practices and the need for flexible financial models to deal with changing policy environments.