International Business Law and Its Environment 9th Edition by Richard Schaffer,Filiberto Agusti,Lucien Dhooge

Exercise 1

Agent protection laws ostensibly protect small, local entities from powerful foreign companies. It is true that because it is easy for a big company to communicate with and transport people to faraway lands, it can easily displace its local agent after it launches the business. In light of the much greater power of a multinational corporation against even a wealthy local, there may be justification for these laws. Yet, local representatives tend to become extremely wealthy for not doing very much work. Cynics suggest that the political influence of these local elites has more to do with agent protection laws than with any real desire to help "little guys." Furthermore, where such laws are enforced, local consumers typically have to pay more for the same product. Who is right, the countries that enact agent protection laws or the countries that do not?