(Reply to these 3 posts) (Original Content Only) (100 words per reply) (in-text citations and references are a must)
(Reply to these 3 posts) (Original Content Only) (100 words per reply) (in-text citations and references are a must)
1. Key Term and Why You Are Interested in It
OPEC
I am keenly interested in the Organization of the Petroleum Exporting Countries (OPEC) due to its potential relevance to my forthcoming final research paper. As a significant player in the global energy sector, OPEC’s policies and actions have far-reaching implications for the business landscape, particularly in industries heavily reliant on oil and energy resources (Ostic et al., 2022). Exploring OPEC’s decision-making processes, market influence, and interactions with non-member nations, particularly in light of recent events, can provide valuable insights into international business dynamics, energy economics, and geopolitical factors affecting global organizations (Ostic et al., 2022). Analyzing the impact of OPEC’s policies on energy prices, supply chain management, and sustainable business practices could yield pertinent findings for future research. Moreover, OPEC’s role in shaping energy policies, its response to emerging energy technologies, and its potential influence on global energy transition efforts make it an intriguing subject of study within sustainable business strategies, especially considering the organization’s significant economic impact and geopolitical influence (Kharchenko et al., 2022).
Explanation of the Key Term
“To a larger group give a larger inheritance, and to a smaller group a smaller one; each is to receive its inheritance according to the number of those listed” (Numbers 26:54 New International Version). This verse highlights the significance of fair resource distribution and the strength of unity in large groups, a principle exemplified by the Organization of the Petroleum Exporting Countries (OPEC). OPEC is a prominent international intergovernmental organization formed in 1960 by five countries, Iran, Iraq, Saudi Arabia, Kuwait, and Venezuela, to coordinate and unify their petroleum policies and ensure fair and stable prices for petroleum producers (Economou & Fattouh, 2021; Satterlee, 2023). OPEC comprises 13 member nations, primarily in the Middle East, Africa, and Latin America. These nations collectively control a significant portion of the world’s oil reserves and production, making OPEC a pivotal player in the global oil market. OPEC’s fundamental purpose is to stabilize oil prices and ensure a steady income for its member countries by regulating oil production levels (Satterlee, 2023). OPEC sets production quotas for its members to achieve their goals, which can be adjusted based on market conditions. The decisions made by OPEC significantly affect global oil prices, supply, and energy security, consequently affecting member nations’ economies and oil-importing countries worldwide. OPEC’s actions and policies are subjects of intense scrutiny and debate within international economics and politics, as they directly impact global energy standing.
Major Article Summary
Kharchenko et al. (2022) examine the economic and political globalization’s influence on OPEC member countries’ export operations using data from the KOF Globalization, which assesses economic, social, and political globalization. The authors argue that the proceeds from the sale of resources to global markets can serve as a financial phase for implementing government development programs for a country. However, Kharchenko et al. (2022) also argue that solely basing revenue on raw material exports can lead to resource condemnation, causing countries to overly rely on a single commodity and fail to diversify their economies. Indeed, quality institutions and democratic governance can mitigate the adverse effects of resource dependence on economic structure and exports, particularly in highly developed states. In contrast, developed countries may experience the negative repercussions of such dependence.
Kharchenko et al. (2022) find that economic globalization positively impacts OPEC countries’ exports and helps OPEC countries diversify their economies and reduce their dependence on oil exports, whereas political globalization has a negative impact. Indeed, to exemplify this reality, Kharchenko et al. (2022) analyze Congo’s political and economic landscape, revealing the disparity between its resources and current state. Kharchenko et al. (2022) maintain that OPEC countries should continue diversifying their economies and reducing their dependence on oil exports. They also suggest that OPEC countries should focus on improving their political institutions and reducing political instability to mitigate the adverse effects of political globalization. Overall, the article’s findings provide valuable insights into the relationship between globalization and exports in OPEC countries.
Discussion
Cited Work Relationship to Major Summary and Assigned Readings
This week’s topic was financial markets, monetary systems, and regional economic integration. Kharchenko et al. (2022) discuss the impact of economic and political globalization on OPEC member countries’ export operations. The study’s findings have implications for financial markets and monetary systems, as they suggest that economic globalization can positively impact exports. Satterlee (2023) also reinforces OPEC’s significant impact on global oil prices through the supply and demand theory. In contrast, political globalization can have a negative impact; Satterlee (2023) supports Kharchenko et al. (2022) statement with the political issue in Iran, leading to oil shortage speculation, consequently causing prices to increase. The article also highlights the importance of diversifying economies and improving political institutions to mitigate the adverse effects of globalization. Regarding regional economic integration, Kharchenko et al. (2022) suggest that OPEC countries should focus on reducing their dependence on oil exports and diversifying their economies to promote regional economic integration.
Cited Work Relationship to the Other 4 Articles
Zhang et al. (2021) maintain Satterlee’s (2023) theory that OPEC indirectly influences oil pricing and argue that OPEC+ countries use tariff and non-tariff instruments to influence trade wars in the global oil market. Economou and Fattouh (2021) argue that OPEC has played a crucial role in stabilizing the oil market and ensuring fair prices for producers and consumers. They also highlight the importance of OPEC in mitigating supply disruptions and price spikes. However, they also state that conflicting interpretations exist in the literature about the role and importance of OPEC and that empirical evidence presents mixed results. Indeed, Omoke and Uche (2021) uncover that oil price shocks significantly impact purchasing power in OPEC countries, with some countries experiencing a sharp decline in purchasing power in response to persistent oil price shocks, reinforcing Kharchenko et al. (2022)’s concept of sector diversity. Ostic et al. (2022) support this vision by adopting an environmental approach and recommend balancing environmental protection and economic growth for OPEC countries, as there are mixed relationships between oil and gas exports, FDI, GDP, and carbon emissions.
2. Foreign Exchange Market (FX)
Key Term and Why You Are Interested in It
Foreign Exchange Market: Since the Foreign Exchange Market (FX) has such a profound impact on the world of international business and finance, the thought of doing research on it intrigues me. Companies engaged in international trade and investors active in global financial markets need a deep familiarity with the workings of currency trading, valuation, and the various factors influencing exchange rates. Several factors, including economic risk management, trade competitiveness, and financial decision-making, make the aforementioned key term very relevant. Foreign currency (FX) trends and dynamics are also important to know in order to make educated judgements in the ever-changing global economic climate. Because of this, it’s fascinating on a professional and intellectual level.
Explanation of the Key Term
The FX market, or Foreign Exchange Market, is a decentralised global marketplace for the trading of currencies. A crucial part of international trade and finance, the aforementioned system facilitates the exchange of one currency for another. Exchange rates, which represent the value of one currency in relation to another, and currency pairs, in which the base currency is acquired by selling the quotation currency, are both key parts of the foreign exchange market. Economic data, geopolitical events, interest rates, and the general condition of the market may all affect currency exchange rates. Foreign exchange (FX) knowledge is crucial for making educated financial decisions, actively participating in the global economy, and successfully managing currency risk.
Major Article Summary
The selected academic paper, “The long-run effects of geopolitical risk on foreign exchange markets: evidence from some ASEAN countries,” written by Hui (2021) analyses how geopolitical events affect currency exchange rates and the broader foreign exchange market. This study, published in a reputable financial journal i.e., International Journal of Emerging Markets, looks at how recent geopolitical events have affected certain currency pairs. The research also use statistical techniques to determine the connections between geopolitical events like trade disputes, political crises, and international conflicts and the volatility in currency exchange rates. Currency values may be drastically affected by geopolitical events, as is emphasised in this article. An extreme drop in value of one currency may occur, for instance, if a trade dispute between two major economies rapidly escalated. In addition, the study delves further, looking at how market participants like speculators and institutional investors react to geopolitical news that might increase currency volatility. Finally, the research concluded by emphasising the importance of geopolitical factors in the FX market and the formation of currency exchange rates. The importance of keeping a close eye on geopolitical developments as part of any foreign currency risk management or investing plan is highlighted by this fact.
Discussion
A.The article’s description of the Foreign Exchange (FX) Market is consistent with the article’s focus on the volatility of currency rates, which are affected by geopolitical events. Understanding foreign currency (FX) is crucial in international trade, and this importance is emphasised. Moreover, it is closely connected to the subject matter of the module as it highlights the significance of geopolitical events in influencing currency exchange rates, which is a crucial element in the field of risk management and decision-making within the realm of international finance. Furthermore, the article highlights the practical importance of understanding foreign exchange (FX) in the realm of international business.
B.The selected article serves as a valuable addition to existing research by offering a distinct perspective on the foreign exchange (FX) market, emphasising its susceptibility to geopolitical shocks. On the other hand, the remaining papers may go into subjects such as the examination of exchange rate forecasting models, the analysis of central bank actions, or the evaluation of currency market liquidity. Collectively, these literary pieces provide a full comprehension of the subject matter known as FX, illustrating its inclusion of many aspects such as economic foundations and external influences. These elements collectively contribute to the intricate nature and importance of FX in the realm of international commerce and finance.
3. Key Term Selection
Brexit
The term that I have decided to research further is Brexit. This topic is of interest to me mainly because I would like to understand it better and the effect of it. With changing regulations in the European Union (EU), businesses have to figure out the best way to adapt their products to be able to suffice these regulations, as well as new regulations that are being developed within the United Kingdom (UK). Prior to Brexit, the consideration would have solely been with the European Union, but now businesses need to factor in UK considerations.
Explanation of the Key Term
Brexit is a topic that we all have heard about in some manner over the last handful of years. Brexit is the “withdrawal of the United Kingdom from the European Union” (Satterlee, 2023, p. 182).
Originally conceived back in 1974, the official decision to withdraw from the EU was brought to a vote in the UK in 2017. With a majority of British citizens in support, the original decision was made to leave by April 2019. Due to delays in a final agreement in Parliament, the date of Brexit was pushed back to December 31, 2020. Reasons for the vote in favor of Brexit included the desire to regain sovereignty, immigration issues and the overall economy.
Major Article Summary
The focus of my research was around the impacts of Brexit on aspects of the economy and finance. The main article that I reviewed was titled “The Impact of Brexit on EU Trade Policy” by De Ville and SilesBrügge. As title of the paper implies, the focus was around how Brexit would impact the trade policy for the remaining members of the EU. The authors segment their analysis into two categories – static effects and dynamic effects. In terms of static effects, the authors state that one of the major institutional impacts of Brexit would be that protectionist members like Spain, France and Italy would gain more influence in trade policy decisions due to the redistribution of votes without the UK, potentially leading to a more conservative approach to trade (De Ville and Siles-Brügge, 2019, p. 9). In addition, it is noted that since the UK has a specialization in service exports, Brexit could drive EU trade policy to be more driven by the agricultural and manufacturing interests of the remaining members (p. 11). The dynamic aspects investigated are the impact on relocation and international negotiations. For relocation, the authors state that it is believed that the optimal trade policy would be centered around the European Economic Area to “lessen the pressure for firms to relocate both because of continued alignment and reduced uncertainty” (p. 13). Finally, the authors note that Brexit may have a direct impact on tariff-rate quotas on certain food that need to be renegotiate between the UK and EU (p. 13). Ultimately, De Ville and SilesBrügge (2019), concludes that the impact of Brexit cannot be fully assessed by just removing the country from the union due to the dynamic factors that come into play, but they also believe that Brexit will reshape aspects of EU trade policy (p.15).
Discussion
A. How main article relates to explanation and module content.
The article by De Ville and Siles-Brügge (2019) discusses the overall impact of Brexit on EU trade policy. As Satterlee (2018) states in the module, regional trade integration is aimed at achieving “economic prosperity, international peace and democracy” (p. 167). The belief behind Brexit is that the UK would be better off operating as a sovereign nation outside of the EU, then they would as a member. De Ville and Siles-Brügge (2019) present the case that Brexit would also not have the negative impact for the remaining 27 nations in the EU as would be expected when taking a static view of the situation (p. 15). Overall, the article shows that the EU will still be able to function with prosperity, peace and democracy without the UK.
B. How cited work relates to other articles researched.
The focus of my research was around the trade and financial impacts of Brexit. In Latorre, et al. (2019), the authors discuss the impact of Brexit on trade and foreign direct investment, concluding that the UK would see more significant losses as a result of Brexit than the remaining members of the EU (p. 24). These findings are similar to the conclusion from De Ville and Siles-Brügge (2019), though it does foresee larger impacts on the UK. In addition, Steinberg (2019) examined the macroeconomic impact of trade policy uncertainty due to Brexit, concluding that Brexit would have a significant impact on the UK economy in the long run and that the welfare cost of uncertainty is minimal (p. 194). This article demonstrates similar thoughts as the other two articles on Brexit’s impact on trade that the UK will see more impact than the EU.
In terms of financial impacts, there were two additional articles that I researched. The first article takes a look at the impact of Brexit on financial markets as a whole. Hohlmeier and Fahrholz (2018) evaluate the impacts on various financial markets concluding that the UK departure would cause major impacts on the economy in Europe due to magnitude of financial activities that the UK specialized in, as well as the fact that London is a leading financial center globally (p.8). The fact that the UK has a specialization in financial services reiterates the stance by De Ville and Siles-Brügge that EU would be impacted in those areas. Finally, the last article examines the impact of Brexit on the exchange rate of the British pound. Korus and Celebi (2019) take a look at the impact of Brexit events on spot rate for the British pound against the Euro and against the US dollar, concluding that “bad news” resulted in depreciation compared to both currencies, while “good news” resulted in appreciation against the Euro and no effect against the US dollar (p. 187). The closer correlation to the exchange rate with the Euro makes sense considering the closer tie to each other in general.
Collepals.com Plagiarism Free Papers
Are you looking for custom essay writing service or even dissertation writing services? Just request for our write my paper service, and we'll match you with the best essay writer in your subject! With an exceptional team of professional academic experts in a wide range of subjects, we can guarantee you an unrivaled quality of custom-written papers.
Get ZERO PLAGIARISM, HUMAN WRITTEN ESSAYS
Why Hire Collepals.com writers to do your paper?
Quality- We are experienced and have access to ample research materials.
We write plagiarism Free Content
Confidential- We never share or sell your personal information to third parties.
Support-Chat with us today! We are always waiting to answer all your questions.
