The level of protection used in these economies does not allow for easy entry. (Robinson, Quayle & McEachern, 1994, pp. 40-41).
Similarly, the legal system of a country can affect a firm's investment strategy. Countries that have strict standards in product safety, environmental safety, etc. may not seem as attractive as country who does not put as much emphasis on this, due to the cost to implement and maintain these regulations. This has been seen in many developing countries. Also intellectual property right protection is another area upon which firms may consider when deciding to invest. This can be seen due to cases such as Microsoft and their battle with the software piracy in China. (Hill, 1999 p.49) .
The culture of a country is also a significant point of interest to firms when deciding to invest. Firms must take into consideration language barriers, religious differences, different social structures, education and so on. Firms must be well informed on all of these or risk being unsuccessful. This was seen with the introduction of Euro Disney. Problems with staffing, policies and accommodation arose. All of these however, probably could have been avoided had Disney made a conscious effort to understand the European culture. (Hill, 1999, p81).
The availability of resources and their subsequent cost are also areas in which managers must look at. The countries that benefit from large, low cost endowments of a factor of production attract firms that need that factor of production. This follows on from the Heckscher-Ohlin theory and can be seen in industries such as computer manufacturing. Parts requiring high skilled labour are based in countries such as the US and Japan, since they both have large pools of skilled labour. The final assembly of the computer is a low skilled task, so developing countries such as Mexico are targeted as they have large pools of low-cost labour. (Prakash Sethi, 1972 p328).
