European Business Research Paper Example | Topics and Well Written Essays - 2000 words

European Business - Research Paper Example A major reduction in demand in the largest market of EU, Germany, was the main reason for export reduction in countries like France, Italy and UK which are its main export partners for automobiles. The following figure shows that the proportion of companies exporting in the EU countries in 2006 had substantially declined over the 1997 period. The situation worsened post financial crisis of 2008 following which countries like Ireland, Greece and Turkey suffered deep economic downturn. The tourism industry also suffered immensely on account of the financial crisis of 2008. All the 27 members of the EU block suffered both resident and non-resident night spends decline since 2008 (Leviev-Sawyer 2010). With the exception of Sweden which saw a positive 0.1% increase in night spend, there was up to 23.3% reduction in member countries like Latvia (Leviev-Sawyer 2010). Another notable feature was that non-residents formed only 44% of nights spent in hotels and residents formed 56% of the nigh t occupancy in 2009 across all the EU member countries. This shows that the proportion of tourist movement across the member countries was much lower as compared to the internal tourist night spends. Thus, the present crisis had a major negative impact on cross border tourism industry within the member countries. ... ows the following pattern (Luff 2008): UK stands at the sixth position in the list of countries which had investments in Turkey between 2002 and 2007 (Luff 2008). If we look at the number of companies of British origin which have invested in Turkey, we can see a substantial rise since 2002. The following figure shows the pattern of investment (Luff 2008). All the major British companies like Tesco, Vodafone, HSBC, Shell, Imperial Tobacco and BP have their investments here. The following chart shows the top 5 FDI inflows into Turkey in 2006 (Luff 2008). The top 3 companies are from the EU member countries and have invested in telecom and banking sectors. This is mainly because of the opening up of these sectors by the Turkish government. Another industry which has substantial impact for the EU member countries is the outsourcing industry. Poland experienced the largest inflow of outsourcing business during the period 1995 to 2002 (Lorentowicz, Marin and Raubold 2005). Austria was the next in line. The following table shows the FDI patterns of Austria and Poland during the various periods. The pattern shows that Austria has substantially increased its investments in new member countries like Hungary, Poland, Croatia, Romania and Bulgaria while investments into UK have decreased over the previous decades. If we look at Poland’s inflows, we can see that France, Germany and Netherlands accounts for around 51% of the FDI (Lorentowicz, Marin and Raubold 2005). This shows that Poland is a favorite destination for these countries for outsourcing businesses mainly because of the availability of low cost and highly skilled work force. The major drivers of outsourcing business to these new member countries are low labor costs and cultural affinity of these countries to the