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Subjects and environment of international economic relations





Describing the status of participants in international economic relations, it should be noted that they act as relatively independent entities to achieve its economic interests. Among them are:

• individuals (endowed with legal capacity, individual entrepreneurs and merchants);

• legal entities (companies, enterprises, TNC);

• State;

• international organizations.

The most significant and increasing role in international economic relations is played by transnational and multinational companies (TNC and MNC).

Their work is characterized by large scale and complex character. It includes international production and investment, financial, credit, marketing and trading activities and other world economic relations, which should illustrate specific data.

Analysis of international business and its performance will not be complete unless the environment that affects it is considered. Since each of the economic relations is an "open system", its activity is dependent on the outside world. Factors affecting the activity of subjects are of two kinds: direct effects and indirect effects.

The first group includes those factors which directly influence the actions of IER subjects. They are: economic behaviour of suppliers, customers, competitors, the laws and institutions of government regulation.

Regarding indirect factors, they have no direct impact on the actions of economic relations. These factors include: the state of the economy, international political events, social and cultural factors.

Combination of the above factors creates an environment of international economic relations, i.e. a kind of aura that accompanies and mediates international business associated with movement of resources, goods, services, information, capital and labour across national borders.

If an entity starts its industrial, commercial or investment activities, it must take into account the environment and its impact on the strategy of firm behaviour in the global market.

Scientific classification environment is as follows:

1. Political and legal environment:

• political processes and institutions;

• legislation.

2. Economic environment:

• character of economic system;

• structure of the economy;

• efficiency and orientation.

3. Socio-cultural environment:

• motivation to work;

• education and training;

• communication;

• ecology.

4. Infrastructure environment and resources:

• natural resources;

• population;

• transport;

• information and communication systems.

The effectiveness of the international economic system largely depends on:

- Firstly, the degree of development of all elements of the system;

- Secondly, the pace and the dynamics of international integration processes;

-Thirdly, the speed of propagation and consolidation of post-model development worldwide;

- Fourth, unify development environment IER;

- Fifth, accelerating the formation of global regulatory mechanisms.





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