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75-411: International business involves cross-border transactions of goods and services between two or more countries. Transactions of economic resources include capital, skills, and people for the purpose of the international production of physical goods and services such as finance, banking, insurance, and construction. International business is also known as globalization . International business encompasses

150-650: A company can become an international business. Therefore, to conduct business overseas, companies should be aware of all the factors that might affect any business activities, including, but not limited to: difference in legal systems, political systems, economic policy , language , accounting standards , labor standards , living standards, environmental standards , local cultures , corporate cultures , foreign-exchange markets , tariffs , import and export regulations, trade agreements , climate , and education . Each of these factors may require changes in how companies operate from one country to another. Each factor makes

225-419: A conflict. People want to live in a clean and quiet environment, without pollution or unnecessary noise. If a conflict arises, this may lead to a negative change in customer's perception of the company. Actual or potential threat of adverse effects on living organisms and environment by effluents, emissions, wastes, resource depletion , etc., arising out of an organization's activities is considered to be risks of

300-411: A country that has an uncertain assurance of safety from these attacks. Bribery is the act of receiving or soliciting of any items or services of value to influence the actions of a party with public or legal obligations. This is considered to an unethical form of practicing business and can have legal repercussions. Firm that want to operate legally should instruct employees to not involve themselves or

375-406: A country's situation and put a firm in an awkward position. Political risks are the likelihood that political forces will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. Political risk tends to be greater in countries experiencing social unrest . When political risk is high, there is a high probability that a change will occur in

450-438: A crucial role in sustainable development, as companies increasingly prioritize ethical practices, environmental responsibility, and social impact. Collaboration between governments, businesses, and international organizations is essential to address issues like climate change, labor rights, and economic inequality. In essence, international business is a dynamic force driving economic growth, fostering global cooperation, and shaping

525-443: A crucial role. It is truly impossible to gain an understanding of a culture's buying habits without first taking the time to understand the culture. Examples of the benefit of understanding local culture include the following: The international business standards focus on the following: By focusing on these, students will gain a better understanding of Political economy . These are tools that would help future business people bridge

600-458: A departure from the earlier norm where firms held minor or passive ("portfolio") investments abroad. This paradigm shift necessitated a fresh nomenclature, leading to the introduction of the term "multinational enterprise" (MNE), referring to entities with substantial operations in multiple nations. "International business" is also defined as the study of the internationalization process of multinational enterprises. A multinational enterprise (MNE)

675-457: A difference and a connection. One of the first scholars to engage in developing a theory of multinational companies was Canadian economist Stephen Hymer . Throughout his academic life, he developed theories that sought to explain foreign direct investment (FDI) and why firms become multinational. There were three phases of internationalization according to Hymer's work. In this thesis, the author departs from neoclassical theory and opens up

750-488: A diverse range of channels that facilitate the dissemination of information and communication among businesses operating across borders. These channels play a crucial role in keeping stakeholders informed about global market trends, emerging opportunities, and potential risks. Here are some of the key types of international business media: In addition to traditional media, there are also a number of social media channels that focus on international business. These channels can be

825-422: A firm appropriate tools to reduce risk of failure abroad. Risks that arise from poor planning include: large expenses in marketing, administration and product development (with no sales); disadvantages derived from local or federal laws of a foreign country, lack of popularity because of a saturated market , vandalism of physical property due to instability of country; etc. There are also cultural risks when entering

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900-423: A foreign market. Lack of research and understanding of local customs can lead to alienation of locals and brand dissociation. Strategic risks can be defined as the uncertainties and untapped opportunities embedded in your strategic intent and how well they are executed. As such, they are key matters for the board and impinge on the whole business, rather than just an isolated unit. A company has to be conscious about

975-683: A gift economy, valuables are given without any formal declaration of repayment, often thought to be a form of reciprocal altruism . Official systems of credit and debt were first created around 1800 BCE by the Babylonians , who established the first formal interest rate limits with the Code of Hammurabi . Many cultures around the world began using commodity money —objects whose value comes from their intrinsic value. These often included gold or silver coins, along with non-metal objects such as cowrie shells , beaver pelts , and dried corn. Between 1000 BCE and

1050-407: A good way to stay up-to-date on the latest news and developments, and they can also be a valuable platform for connecting with other businesses and professionals. To achieve success in penetrating a foreign market and remaining profitable, efforts must be directed towards the planning and execution of Phase I. The use of conventional SWOT analysis , market research , and cultural research, will give

1125-524: A good, service, or other commodity is sold to a consumer in exchange for money. Most purchases are made with cash payments, including physical currency , debit cards , or cheques . The other main form of payment is credit , which gives immediate access to funds in exchange for repayment at a later date. There is no evidence to support the theory that ancient civilizations worked on systems of barter . Instead, most historians believe that ancient cultures worked on principles of gift economy and debt . In

1200-425: A government governs a country ( governance ) can affect the operations of a firm. The government might be corrupt , hostile, or totalitarian ; and may have a negative image around the globe. A firm's reputation can change if it operates in a country controlled by that type of government. Also, an unstable political situation can be a risk for multinational firms. Elections or any unexpected political event can change

1275-414: A government may say it intends to raise interest rates indefinitely to bring inflation under control, but then relax its stance later. This makes policy non-credible and ultimately ineffective. A rule-based policy can be more credible, because it is more transparent and easier to anticipate. Examples of rule-based policies are fixed exchange rates , interest rate rules , the stability and growth pact and

1350-446: A government will indiscriminately change the laws, regulations, or contracts governing an investment—or will fail to enforce them—in a way that reduces an investor's financial returns is what we call 'policy risk.'" Exchange rates can fluctuate rapidly for a variety of reasons, including economic instability and diplomatic issues. Terrorism is a voluntary act of violence towards a group(s) of people. In most cases, acts of terrorism

1425-400: A host country (when these are higher) and gaining an experience curve . Some possible disadvantages to exporting are high transport costs and high tariff barriers . The second entry mode is a turnkey project. In a turnkey project, an independent contractor is hired by the company to oversee all of the preparation for entering a foreign market. Once the preparation is complete and the end of

1500-530: A host-country firm, or setting up a new wholly owned subsidiary in the host country. The first entry mode is exporting . Exporting is the sale of a product in a different national market than a centralized hub of manufacturing. In this way, a firm may realize a substantial scale of economies from its global sales revenue. As an example, many Japanese automakers made inroads into the U.S. market through exporting. There are two primary advantages to exporting: avoiding high costs of establishing manufacturing in

1575-1245: A myriad of crucial elements vital for global economic integration and growth. At its core, it involves the exchange of goods, services, and capital across national borders. One of its pivotal aspects is globalization, which has significantly altered the landscape of trade by facilitating increased interconnectedness between nations. International business thrives on the principle of comparative advantage, wherein countries specialize in producing goods and services they can produce most efficiently. This specialization fosters efficiency, leading to optimal resource allocation and higher overall productivity. Moreover, international business fosters cultural exchange and understanding by promoting interactions between people of diverse backgrounds. However, it also poses challenges, such as navigating complex regulatory frameworks, cultural differences, and geopolitical tensions. Effective international business strategies require astute market analysis, risk assessment, and adaptation to local customs and preferences. The role of technology cannot be overstated, as advancements in communication and transportation have drastically reduced barriers to entry and expanded market reach. Additionally, international business plays

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1650-408: A new area of international production. At first, Hymer started analyzing neoclassical theory and financial investment , where the main reason for capital movement is the difference in interest rates . After this analysis, Hymer analyzed the characteristics of foreign investment by large companies for production and direct business purposes, calling this Foreign Direct Investment (FDI). By analyzing

1725-400: A predominant issue in the 19th century, as it became clear that industrial output, employment, and profit behaved in a cyclical manner. One of the first proposed policy solutions to the problem came with the work of Keynes , who proposed that fiscal policy could be used actively to ward off depressions, recessions and slumps. The Austrian School of economics argues that central banks create

1800-575: A risk for a company to operate in a country and they may experience an unexpected economic crisis after establishing the subsidiary. Economic risks is the likelihood that economic management will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. In practice, the biggest problem arising from economic mismanagement has been inflation. Historically many governments have expanded their domestic money supplying misguided attempts to stimulate economic activity. According to Professor Okolo: "This area

1875-414: A set period of time (called a "term"). The lender usually charges an additional percentage on top of the initial amount borrowed, called the " interest rate ". Mortgages are similar to loans, but are usually for a larger amount of money and over a longer term, often for buying real estate . Mortgages are almost always secured by collateral , most commonly the real estate they are being used to purchase. If

1950-421: A significantly higher chance of being sent abroad to work under the international operations of a firm. The following table provides descriptions of higher education in international business and its benefits. - General or operations managers ($ 95,000)* - Economists ($ 91,000)* - Internship or study abroad program - Foreign language requirement Financial transaction A financial transaction

2025-466: A static view of cross-border interactions. However, the term "foreign" often evoked notions of remoteness or strangeness, failing to capture the dynamic essence of international engagements. As commerce evolved with the advent of firms engaging in substantial direct investments across borders, newer terms to encapsulate the changing landscape. The mid-19th century marked the rise of companies owning and controlling production facilities in various countries,

2100-529: A very high tariff on foreign trade. By the early modern age, more policy choices had been developed. There was considerable debate about mercantilism and other restrictive trade practices like the Navigation Acts , as trade policy became associated with both national wealth and with foreign and colonial policy. Throughout the 19th century, monetary standards became an important issue. Gold and silver were in supply in different proportions. Which metal

2175-649: A wholly owned subsidiary, when a firm owns 100 percent of the stock of a company in a foreign country because it has either set up a new operation or acquires an established firm in that country. Exports and import Data is from the CIA World Factbook , compiled in 2017: Strategic variables affect the choice of entry mode for multinational corporation expansion beyond their domestic markets . These variables are global concentration, global synergies, and global strategic motivations of MNC. International Business Media International business media encompasses

2250-616: Is a branch of law that basically aims to provide legal rules applicable to relations between business entities when the movement of products, services or values involves several countries. There has been growth in globalization in recent decades due to the following factors. Managers in international business must understand social science disciplines and how they affect different functional business fields. To maintain and achieve successful business operations in foreign nations, persons must understand how variations in culture and traditions across nations affect business practices. This idea

2325-637: Is a company that has a worldwide approach to markets, production and/or operations in several countries. Well-known MNEs include fast-food companies such as: McDonald's (MCD), YUM (YUM), Starbucks Coffee Company (SBUX), etc. Other industrial MNEs leaders include vehicle manufacturers such as: Ford Motor Company, and General Motors (GMC). Some consumer electronics producers such as Samsung, LG and Sony, and energy companies such as Exxon Mobil, and British Petroleum (BP) are also multinational enterprises. Multinational enterprises range from any kind of business activity or market, from consumer goods to machinery manufacture;

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2400-598: Is a set of policies that are imposed by an international body. This can occur (for example) as a result of intervention by the International Monetary Fund . The first economic problem was how to gain the resources it needed to be able to perform the functions of an early government: the military , roads and other projects like building the Pyramids . Early governments generally relied on tax in kind and forced labor for their economic resources. However, with

2475-419: Is affected by the currency exchange rate, government flexibility in allowing the firms to repatriate profits or funds outside the country. The devaluation and inflation will also affect the firm's ability to operate at an efficient capacity and still be stable." Furthermore, the taxes that a company has to pay might be advantageous or not. It might be higher or lower in the host countries. Then "the risk that

2550-469: Is an agreement , or communication , between a buyer and seller to exchange goods , services , or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A financial transaction always involves one or more financial asset, most commonly money or another valuable item such as gold or silver . There are many types of financial transactions. The most common type, purchases, occur when

2625-650: Is derived from hatred of religious, political and cultural beliefs. An example was the infamous 9/11 attacks , labeled as terrorism due to the massive damages inflicted on American society and the global economy stemming from the animosity towards Western culture by some radical Islamic groups . Terrorism not only affects civilians, but it also damages corporations and other businesses. These effects may include: physical vandalism or destruction of property , sales declining due to frightened consumers and governments issuing public safety restrictions. Firms engaging in international business will find it difficult to operate in

2700-498: Is gained through the knowledge and use of language, thereby mitigating a language barrier . A study by Lohmann (2011) in Economics Letters delved into the impact of language barriers on trade. The findings suggest that fluency in the local language can significantly enhance trade interactions. Advantages of being an international businessperson who is fluent in the local language include the following: In many cases, it plays

2775-403: Is generally directed to achieve particular objectives, like targets for inflation , unemployment , or economic growth . Sometimes other objectives, like military spending or nationalization are important. These are referred to as the policy goals : the outcomes which the economic policy aims to achieve. To achieve these goals, governments use policy tools which are under the control of

2850-540: Is known as cultural literacy . Without knowledge of a host country's culture, corporate strategizing is more difficult and error-prone when entering foreign markets compared with the home country's market and culture. This can create a "blind spot" during the decision making process and result in ethnocentrism . Education about international business introduces the student to new concepts that can be applicable in international strategy in topics such as marketing and operations. A considerable advantage in international business

2925-406: Is technological change, particularly developments in communication, information processing , and transportation technologies. The discourse surrounding international business has a transition in terminology over the years, reflecting shifts in understanding and the expanding scope of cross-border commerce. Initially, phrases such as "foreign trade" and "foreign exchange" were prevalent, embodying

3000-426: Is the difference between V (the value of the product being sold) and C (the cost of production per each product sold). Value creation can be categorized as: primary activities ( research and development , production, marketing and sales, customer service ) and as support activities (information systems, logistics, human resources). All of these activities must be managed effectively and be consistent with

3075-679: The Golden Rule . Some policy rules can be imposed by external bodies, for instance, the Exchange Rate Mechanism for currency. A compromise between strict discretionary and strict rule-based policy is to grant discretionary power to an independent body. For instance, the Federal Reserve Bank , European Central Bank , Bank of England and Reserve Bank of Australia all set interest rates without government interference, but do not adopt rules. Another type of non-discretionary policy

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3150-411: The International Monetary Fund or World Bank as well as political beliefs and the consequent policies of parties. Almost every aspect of government has an important economic component. A few examples of the kinds of economic policies that exist include: Stabilization policy attempts to stimulate an economy out of recession or constrain the money supply to prevent excessive inflation. Policy

3225-432: The firm strategy . However, the success of firms that extend internationally depends on the goods or services sold and on the firm's core competencies (Skills within the firm that competitors cannot easily match or imitate). For a firm to be successful, the firm's strategy must be consistent with the environment in which the firm operates. Therefore, the firm needs to change its organizational structure to reflect changes in

3300-495: The money supply and interest rates as well as the labour market , national ownership , and many other areas of government interventions into the economy. Most factors of economic policy can be divided into either fiscal policy , which deals with government actions regarding taxation and spending , or monetary policy , which deals with central banking actions regarding the money supply and interest rates. Such policies are often influenced by international institutions like

3375-400: The "franchisor" sells the intangible property to the franchisee, and also requires the franchisee operate as dictated by the franchisor. Lastly, a joint venture and wholly owned subsidiary are two more entry modes in international business. A joint venture is when a firm created is jointly owned by two or more companies (Most joint venture are 50-50 partnerships ). This is in contrast with

3450-462: The 2019 Nobel Prize laureates exemplifies the gold type of evidence. However, the emphasis put on experimental evidence by the movement of evidence-based policy (and evidence-based medicine ) results from the narrowly construed notion of intervention, which encompasses only policy decisions concerned with policymaking aimed at modifying causes to influence effects. In contrast to this idealized view of evidence-based policy movement, economic policymaking

3525-503: The 20th century, governments adopted discretionary policies like demand management designed to correct the business cycle . These typically used fiscal and monetary policy to adjust inflation, output and unemployment. However, following the stagflation of the 1970s , policymakers began to be attracted to policy rules . A discretionary policy is supported because it allows policymakers to respond quickly to events. However, discretionary policy can be subject to dynamic inconsistency :

3600-401: The borrower fails to make the necessary payments on the mortgage, the lender has the right to claim and sell the property in a process known as foreclosure . External transactions are any business transactions that involve more than one party. For example, a company buying inventory from a supplier would be considered external. All cash and credit transactions are external, since they affect

3675-432: The business cycle. After the dominance of monetarism and neoclassical thought that advised limiting the role of government in the economy in the second half of the twentieth century, the interventionist view has once more dominated the economic policy debate in response to the 2007-2008 financial crisis, A recent trend originating from medicine is to justify economic policy decisions with best available evidence. While

3750-420: The card issuer (usually a bank) gives the customer a line of credit with which they can make purchases. The liabilities the customer accrues with the card are usually paid off at a set date, and any unpaid liabilities create interest for the issuer. Loans and mortgages are examples of credit. The lender agrees to give out a lump sum (the " principal ") to the borrower, who pays back the loaned amount over

3825-465: The company in such activities. Companies should avoid doing business in countries where unstable forms of government exist as it could bring unfair advantages against domestic business and/or harm the social fabric of the citizens. International business activities are governed by international commercial law , which is a set of legal rules, conventions, treaties, domestic laws and commercial customs used to regulate trade between countries. Therefore, It

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3900-399: The contract is reached, the plant is turned over to the company fully ready for operation. Licensing and franchising are two additional entry modes that are similar in operation. Licensing allows a licensor to grant the rights to an intangible property to the licensee for a specified period of time for a royalty fee. Franchising, on the other hand, is a specialized form of licensing in which

3975-513: The country's political environment that will endanger foreign firms there. Corrupt foreign governments may also take over the company without warning , as seen in Venezuela. Technological improvements bring many benefits, but some disadvantages as well. Some of these risks include "lack of security in electronic transactions , the cost of developing new technology ... the fact that this new technology may fail, and, when all of these are coupled with

4050-472: The development of money came the first policy choice. A government could raise money through taxing its citizens. However, it could now also debase the coinage and so increase the money supply . Early civilizations also made decisions about whether to permit and how to tax trade . Some early civilizations, such as Ptolemaic Egypt adopted a closed currency policy whereby foreign merchants had to exchange their coin for local money. This effectively levied

4125-440: The downsides of cryptocurrencies is that since they are not tethered to any tangible assets, their price can fluctuate wildly, sometimes by 20% or more in a single day. A cash transaction is any transaction where money is exchanged for a good, service, or other commodity. Cash transactions can refer to items bought with physical money , such as coins or cash, or with a debit card . These differ from credit transactions because

4200-623: The economic and political gap between countries. There is an increasing amount of demand for business people with an education in international business. A survey conducted by Thomas Patrick from University of Notre Dame concluded that bachelor's degree and master's degree holders felt that the training received through education were very practical in the working environment. Increasingly, companies are sourcing their human resource requirement globally. For example, at Sony Corporation , only fifty percent of its employees are Japanese. Business people with an education in international business also had

4275-529: The environment. As new business leaders come to fruition in their careers, it will be increasingly important to curb business activities and externalizations that may hurt the environment. These are the economic risks explained by Professor Okolo: "This comes from the inability of a country to meet its financial obligations. The changing of foreign-investment or/and domestic fiscal or monetary policies. The effect of exchange-rate and interest rate make it difficult to conduct international business." Moreover, it can be

4350-399: The finances of more than one person or group. On the other hand, internal transactions only affect one business. Shifting goods between different departments in a business is an internal transaction, since it does not change the overall finances of the company. Economic policy The economy of governments covers the systems for setting levels of taxation , government budgets ,

4425-411: The first millennium CE, coinage became increasingly common throughout Europe and Asia. In England, banknotes were introduced starting in the 17th century. Each note promised to pay the bearer the value in gold upon demand—this is called a gold standard . In the 20th century, many countries gradually phased out the gold standard in favour of fiat money —money that is not backed by any commodity. Since

4500-433: The future of commerce on a worldwide scale. To conduct business overseas, multinational companies need to bridge separate national markets into one global marketplace. There are two macro-scale factors that underline the trend of greater globalization. The first consists of eliminating barriers to make cross-border trade easier (e.g. free flow of goods and services, and capital, referred to as " free trade "). The second

4575-507: The government. These generally include the interest rate and money supply , tax and government spending, tariffs, exchange rates , labor market regulations, and many other aspects of government. Government and central banks are limited in the number of goals they can achieve in the short term. For instance, there may be pressure on the government to reduce inflation, reduce unemployment, and reduce interest rates while maintaining currency stability. If all of these are selected as goals for

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4650-405: The money is immediately taken from the buyer and given to the seller. Transactions that use credit involve a deferred payment for the goods or services rendered. When something is bought using credit, it gives the seller an asset (the payment at a later date) and gives the buyer a liability (the amount that must be paid at a later date). Credit cards are an example of when credit is used, where

4725-422: The motivations for FDI. According to Hymer, there are two main determinants of FDI; where an imperfect market structure is the key element. The first is the firm-specific advantages which are developed at the specific companies home country and, profitably, used in the foreign country. The second determinant is the removal of control where Hymer wrote: "When firms are interconnected, they compete in selling in

4800-422: The multinational enterprise. His OLI paradigm, in particular, remains as the predominant theoretical contribution to study international business topics. Hymer and Dunning are considered founders of international business as a specialist field of study . The conduct of international operations depends on a company's objectives and the means with which they carry them out. The operations affect and are affected by

4875-410: The outdated existing technology, [the fact that] the result may create a dangerous effect in doing business in the international arena." Companies that establish a subsidiary or factory abroad need to be conscious about the externalizations they will produce, as some may have negative effects such as noise or pollution . This may cause aggravation to the people living there, which in turn can lead to

4950-412: The physical and societal factors and the competitive environment . All firms that want to go international have one goal in common; the desire to increase their respective economic values when engaging in international trade transactions. To accomplish this goal, each firm must develop its individual strategy and approach to maximize value , lower costs, and increase profits. A firm's value creation

5025-430: The previous approaches have been focused on macroeconomic policymaking aimed at sustaining promoting economic development and counteracting recessions, EBP is oriented towards all types of decisions concerned not only with anti-cyclical development but primarily with the growth-promoting policies. To gather evidence for such decisions, economists conduct randomized field experiments. The work of Banerjee, Duflo, and Kremer,

5100-400: The production costs to not waste time and money. If the expenditures and costs are controlled, it will create an efficient production and help the internationalization. Operational risk is the prospect of loss resulting from inadequate or failed procedures, systems or policies; employee errors, systems failure, fraud or other criminal activity, or any event that disrupts business processes. How

5175-592: The same market or one of the firms may sell to the other," and because of this "it may be profitable to substitute centralized decision-making for decentralized decision-making ". Hymer's second phase is his neoclassical article in 1968 that includes a theory of internationalization and explains the direction of growth of the international expansion of firms. In a later stage, Hymer went to a more Marxist approach where he explains that MNC as agents of an international capitalist system causing conflict and contradictions, causing among other things inequality and poverty in

5250-514: The setting in which they are operating and the strategy they are pursuing. Once a firm decides to enter a foreign market, it must decide on a mode of entry. There are six different modes to enter a foreign market, and each mode has pros and cons that are associated with it. The firm must decide which mode is most appropriately aligned with the company's goals and objectives. The six different modes of entry are exporting, turnkey projects , licensing , franchising , establishing joint ventures with

5325-522: The short term, then policy is likely to be incoherent, because a normal consequence of reducing inflation and maintaining currency stability is increasing unemployment and increasing interest rates. This dilemma can in part be resolved by using microeconomic supply-side policy to help adjust markets. For instance, unemployment could potentially be reduced by altering laws relating to trade unions or unemployment insurance , as well as by macroeconomic ( demand-side ) factors like interest rates. For much of

5400-420: The start of the 21st century, online banking has become much more widespread. By 2001, tens of millions of people were doing their banking on the internet . By 2012, between 46 and 82 percent of all transactions were done electronically. Digital currencies , currency that is stored on electronic systems, have gained popularity. Bitcoin , invented in 2009, reached a cap of over US$ 1 trillion in 2021. One of

5475-413: The two types of investments, Hymer distinguished financial investment from direct investment. The main distinguishing feature was control. Portfolio investment is a more passive approach, and the main purpose is financial gain , whereas in foreign direct investment a firm has control over the operations abroad. So, the traditional theory of investment based on differential interest rates does not explain

5550-431: The world. Hymer is the "father of the theory of MNEs", and explains the motivations for companies doing direct business abroad. Among modern economic theories of multinationals and foreign direct investment are internalization theory and John Dunning's OLI paradigm (standing for ownership, location and internationalization ). Dunning was widely known for his research in economics of international direct investment and

5625-604: Was adopted influenced the wealth of different groups in society. With the accumulation of private capital in the Renaissance, states developed methods of financing deficits without debasing their coin. The development of capital markets meant that a government could borrow money to finance war or expansion while causing less economic hardship. This was the beginning of modern fiscal policy . The same markets made it easy for private entities to raise bonds or sell stock to fund private initiatives. The business cycle became

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