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date: 13 June 2021

Abstract and Keywords

Formally, the interaction between domestic policy and international business runs in two directions. States erect policies that affect firms' ability to trade and invest across borders; and the actions of trading and investing firms affect the political climate of the states in which they do business. The relationship, of course, is interactive and changes over time: states influence firms, and firms influence states, and both operate simultaneously in a number of domestic and international arenas. This article concentrates on just one piece of this complex arrangement. Arguing that international business is essentially, incontrovertibly political, it describes the range of state policies that can shape and constrain the behaviour of firms. Specifically, it examines five different kinds of domestic policy: trade policy, foreign direct investment, capital controls, regulation, and competition policy.

Keywords: national policies, domestic politics, international business, investing firms, capital control, transactional groups

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