Factors that Affect Profitability

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Procedures that you need to follow when exporting After establishing that South Korea is an economy with an increasingly more liberal economy, there are some problems for foreign direct investment, mainly through non-transparency and burdensome regulations (Heritage Foundation). In order to take it a step further and to perform a complete analysis of the business environment, it is necessary to compare the business procedures when doing business. As an industry, the imports of foreign goods procedure will be analyzed and contrasted with neighboring countries in order to have a complete snapshot of the business environment. Firstly, The country of interest: South Korea. In what the import of foreign goods is concerned, South Korea has a relatively quick and easy process. Importing procedures are estimated to take 7 days, (2 days for each: preparation of documents, port handling and inland handling and approximately 1 day for customs clearance). The cost of the procedures for the 7 days is estimated to be $790 (World Bank Doing Business, 2011). This information, at first glance seems positive. The procedures are fairly quick and the $790 cost is not an absurd amount of money paid in order to import goods. The bureaucracy is simple. The documents needed are: the bill of lading, customs import declaration and terminal handling receipts (World Bank Doing Business, 2011). Corruption Perception Index The latest corruption perception index by transparency international in 2008 includes five sets of data. These include: the 2008 Corruption Perception Index (CPI) score, the amount of surveys used, the standard deviation, the high low range and the confidence range. Before the analysis of the data, it is important to understand what ea... ... middle of paper ... ...). The Heritage Foundation has ranked South Korea with a very low score of 55 out of 100, which might imply that corruption is widespread and there is still a long way to go to have a positive rating. (Heritage Foundation, 2011) 10) Labor Freedom Labor freedom has the lowest score of 46.5 out of 100. This shows that there are various problems regarding labor, a clear example is the very high cost of firing an employee whilst the non salary cost of employing a worker are moderate (Heritage, 2011). In conclusion, the overall freedom of the country is relatively positive. The ratings of the Heritage Foundation are fairly high, above the world average for the most part. Additionally, the government involvement in business is quite low compared to other countries and at least it is not widespread to a degree to which investors would be fearful to engage in business.

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