... to understand why international business is the new bottom line. The first reason according to Kogut to invest in another country deals with the differences in the rates of return to capital among countries. This helps to explain why money moves across the borders of countries. Exchange rates are a huge factor when doing business internationally, and when they are favorable for you firm you have a greater opportunity to earn more money. Many firms solely go international because they sought after higher rates of return on invested capital. Second the firm must believe there is an additional advantage that outweighs the added costs of operating in an unknown foreign market. This helps to explain why foreign direct investment is important. It helps as the controlling ownership of assets by foreign private firms or individuals. Location is important when looking at what it takes to be a multinational. Most firms try to ...

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