5L5Z0003 Introduction to International Business Theory & Strategy Coursework Assessment Brief | MMU

Key Task and Word Count (or equivalent)

Assignment tasks and word count:

For this assignment, you will be writing an essay on a central component of international business studies: The institutional environment. In no more than 2500 words, you must complete the following task:

Explain the concept of institutional quality and critically assess why it may affect inward foreign direct investment (FDI) into a country. You need to choose two countries to illustrate your argument.

5L5Z0003 Module Learning Outcomes:

• Examine the nature, modes and scope of firms' operations in a global context
• Discuss theoretical models of the internationalisation of firms
• Explain with critical detail the theoretical challenges firms may face in internationalising their operations

This assessment will contribute to the achievement of the following Programme Learning Outcomes:

• Apply theory to discussion and analysis
• Organise work in a logical structure to draw conclusions that follow from the line of argument
• Apply consistent and appropriate referencing and in-text citations
• Identify and explain debates in their global and/or international context

Assignment Details and Instructions

You will have 2500 words to write an essay addressing the task, constituting 100% of your mark for this module. Word counts exclude reference lists. This essay is an individual assignment. You must provide a cover sheet including the title of the assignment, your student ID number, and total word count. You should also include page numbers, and you are not advised to use section headings and sub-headings due to the nature of the essay. The standard of English should be appropriate for an academic essay, consisting of correct spelling and grammar. As this is an essay, avoid writing in the first person (ie, I or we).

The essay should draw on the neo-institutional theory (NIE) we covered in the module. The institutional environment refers to the set of rules, regulations, and norms that shape economic and social interactions within a society. It includes formal institutions such as laws, property rights, and government regulations, as well as informal institutions such as cultural norms and social customs. These institutional arrangements provide the framework within which economic transactions take place.

The concept of institutional quality refers to the overall effectiveness and efficiency of a country's institutions, including its legal, political, and economic systems. It encompasses factors such as the rule of law, property rights protection, government transparency, corruption levels, and regulatory frameworks. Institutional quality plays a crucial role in attracting inward foreign direct investment (FDI) as it provides a favourable environment for businesses to operate and investors to feel secure in their investments. Institutional quality affects FDI inflows in several ways and has a significant impact on the reduction of transaction costs.

In summary, the institutional environment plays a crucial role in determining a country's attractiveness to foreign investors and also influences the ability of domestic firms to expand internationally and their investment decisions.

For this essay, you need to discuss and explain the institutional environment and its impact on firms.

Please see the structure below and what you have to address in each section

• Introduction: Introduce your topic, sections, and conclusion here.
• A critical explanation of a formal and informal institutional environment based on the theory covered in the reading, lectures and tutorials (see Moodle reading list).
• An explanation of how and why the institutional environment can affect the following:
  the attractiveness of a country.
  foreign firms' investment decisions and performance
  The transaction costs that a firm will face in a foreign country
  you can also consider and discuss the impact of specific elements of institutions on firms
• Two countries to illustrate your points. You can discuss how the institutional environment of a specific country affects the foreign investment flows. You may choose one country with a weak institutional environment and one with a strong one. You need to make sure that you provide a detailed analysis of your examples and you back up your arguments with evidence/ data.
• Conclusion: This draws your argument together to restate your point coherently and succinctly.
• Reference List

Where/how do I start?

Key starting points for the essay: 

• Read the assignment brief
• Attend the week 5 seminar. During week 5, you will have the chance to review and evaluate examples of last year's submissions as well as discuss any questions that you may have regarding this assignment.
• Attend week 7 and 8 lectures and seminars.
• Read Chapters 2 and 3 from the book International Business by Mike W. Peng; Klaus Meyer
• Read Chapter 5, sections 5.3 and 5.4; Chapter 10, sections 10.3, 10.4 and 10.5 from the book Multinational Enterprises and the Global Economy by John H. Dunning; Sarianna M. Lundan
• Read the papers that you can find under section 7.3 on Moodle
• On library search, you can use phrases/keywords such as "impact of institutional environment on countries attractiveness", "institutional quality and FDIs", "institutional environment and transaction costs", "institutional quality", and "transaction costs" etc., to find additional academic articles and studies that focus on specific countries.