RENA JOCELLE C.

NALZARO BSA-3

INTERNATIONAL BUSINESS AND TRADE

Word Count: 798

Today’s world of rapid increase in and expansion of technology is the reasons for recent International
Business growth.Globalization seemed to be an unstoppable force (McCann, 2018). In the study of The
Evolution of International Business: An Introduction by Jones (1996) he stated that Economists tended
to treat multinationals as byproducts of post-World War II international financial integration and
improvements in communications and transport technologies. Economists tended to treat
multinationals as byproducts of post-World War II international financial integration and improvements
in communications and transport technologies. According to Stobierski (2021) the term international
business refers to any business that operates across international borders. At its most basic, it includes
the sale of goods and services between countries. In other words, International Business involves
importing the products that local business does not have, exporting products that other foreign business
does not have, or trading through different currencies and gain the profit. Yet, other forms of
international business do exist. For example, a business that produces components or products overseas
but sells them domestically can be considered an international business, as can an organization that
outsources services, such as customer service, to locations where labor expenses are cheaper.

On the other hand, International trade is the purchase and sale of goods and services by companies in
different countries. Consumer goods, raw materials, food, and machinery all are bought and sold in the
international marketplace. In the study How To Write About Economics and Public Policy of Petchko
(2018) international trade is one of the driving forces behind regional groupings and it has implications
for both economic growth and government expenditure. Openness to international trade has the effect
of increasing efficiencies in markets, thus regenerating social welfare that is otherwise lost through
imposition of trade tariffs and quotas (Begovic & Ciftcioglu, 2008). Balassa (1989) stated that
participation in international trade provides a variety of benefits to the developing countries. They may
obtain gains through resource allocation according to comparative advantage; the exploitation of
economies of scale and increased capacity utilization; improvements in technology; increases in
domestic savings and foreign direct investment; and increased employment. Moreover, Kling (2022)
claimed that all of the economic theories of international trade suggest that it enhances efficiency. In
this regard, international trade is like a new technology. It adds to the productive capacity of all
countries that engage in trade. In addition, some efficiency comes from taking advantage.

Subsequently, Subedi (2022) indicated that 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 is technological change, particularly developments in communication, information processing,
and transportation technologies. International Business and Trade is important to both Nation and
Business organizations. It offers them various benefits. Kokemuller (2020) claimed that in general,
companies go international because they want to grow or expand operations. The benefits of entering
international markets include generating more revenue because it allows company to sell their products
to more people, competing for new sales, investment opportunities, diversifying where you can find
new market and increasing your customer base, reducing costs and recruiting new talent. Howerver,
Ghauri et al., (2021) states that the continuing economic growth in the past decades has led to resource
depletion, environmental degradation, and widening social and economic inequality within and across
nations. Sustainable development has become a critical issue that is confronting many societies, regions
and communities. Cavusgil et al. (2011) also said that some international risks are extremely challenging.
Nevertheless, some farsighted firms foresaw these challenges and proactively redeployed key resources
to minimize their negative effects. National differences require managers to formulate approaches
tailored to conditions in each country where the firm does business.

Desk (2023) indicated that the factors affecting the international business environment include the
micro environment that impact how an organization operates, the macro environment that includes
national income levels, inflation rates, currency values, interest rates, etc., which impact an individual’s
ability to do International Business, the political environment which will affect how they want to run
their business in that certain country, the economic environment that also plays a large part in deciding
how well your international expansion will go, the technological environment where some countries
usually embrace technological advancements, poorer countries might not have access to the technology
you need for your business and the cultural environment. All these factors directly influence the
profitability of international businesses. Therefore, entrepreneurs should analyze these factors
extensively before starting with international trade operations.

References:

Jones, G. (1996). The Evolution of International Business: An Introduction. H-Net Book Review. Retrieved
January 14, 2023 from, https://eh.net/book_reviews/the-evolution-of-international-business-an-
introduction/

Stobierski, Tim (29 June, 2021). 5 International Business Examples to Learn From. Harvard Business
School. Retrieved January 14, 2023 from, https://online.hbs.edu/blog/post/international-business-
examples

Petchko K. (2018). How to Write About Economics and Public Policy. Handbook of Agricultural
Economics. Retrieved January 14, 2023 from, https://www.sciencedirect.com/topics/economics-
econometrics-and-finance/international-trad
Balassa, B. (1989). The Importance of Trade for Developing Countries. In: New Directions in the World
Economy. Retrived January 14, 2023 from, https://doi.org 10.1007/978-1-349-10588-5_1

Kling, A. (2018) International Trade. EconLib. Retrieved Januady 14, 2023 from,
https://www.econlib.org/library/Enc/InternationalTrade.html

Subedi, K. (2022) International Business: Concept Definition and Characteristics. Tikapur Multiple
Campus. Retrieved January 14, 2023 from,
https://www.researchgate.net/publication/362829613_International_Business_Concept_Definition_and
_Characteristics

Kokemuller, N. (2020, February 5) Why Do Companies Go International? Bizfluent. Retrieved March 15,
2023, from https://bizfluent.com/facts-5256365-do-

Ghauri, P., Strange, R., Cooke F. L., (2021). Research on International Business: The New Realties. Science
Direct. Retrieved January 14, 2023 from,
https://www.sciencedirect.com/science/article/abs/pii/S0969593121000019

Cavusgil, S. T., Rammal, H., & Freeman, S. (2014). International Business: The New Realities. Pearson
Higher Education AU. Retrieved March 13, 2023 from, https://sites.google.com/site/ibwvietnam/4-risk-
in-internatio

Desk S., (2023) What are the Factors Affecticting the International Business Trade? VakilSearch.
Retrieved January 15, 2023 from, https://www.google.com/amp/s/vakilsearch.com/blog/what-are-the-
factors-affecting-the-international-business-environment/amp/