International Business

Topics: International trade, World Trade Organization, Free trade Pages: 22 (7543 words) Published: May 4, 2013
International business deals with business activities which is both production and services that cross the national boundaries. This activity includes movement of goods, services capital or personnel, transfer of technology, etc. Functionally, by business we mean those human activities, which involve production or purchase of goods and services with the object of selling them at a profit. Today’s world is an era of Global Village or specialization. A particular country is not self-dependent for producing goods and services. One country depends on another for goods and services as well as one area of a particular country depends on another area for meeting demand. This interdependence creates internationals Business. 1) IB field is concerned with the issues facing international companies and governments in dealing with all types of cross border transactions.

2) IB involves all business transactions that involve two or more countries.

3) IB consists of transactions that are devised and carried out across borders to satisfy the objectives of individuals and organizations.

4) IB consists of those activities private and public enterprises that involve the movement across national boundaries of goods and services, resources, knowledge or skills.

International Business should evolve its rhetoric from the relatively uncontroversial idea that “history matters” to exploring how it matters. There are three conceptual reasons for doing so. First, historical variation is at least as good as contemporary cross-sectional variation in illuminating conceptual issues. As an example, we show that conclusions reached by the literature on contemporary emerging market business groups are remarkably similar to independently reached conclusions about a very similar organizational form that was ubiquitous in the age of empire. Second, history can allow us to move beyond the oft-recognized importance of issues of path-dependence to explore the roots of Penrosian resources. Third, there are certain issues that are un-addressable, except in the really long (that is, historical) run. Exploring the causal relationship if any between foreign direct investment, a staple of the International Business literature, and long-run economic development provides one important example.

What are the instruments of policy that a government can use? Trade policy is a collection of rules and regulations which pertain to trade. Every nation has some form of trade policy in place, with public officials formulating the policy which they think would be most appropriate for their country. The purpose of trade policy is to help a nation's international trade run more smoothly, by setting clear standards and goals which can be understood by potential trading partners. In many regions, groups of nations work together to create mutually beneficial trade policies. Although nations are nominally committed to free trade they tend to intervene in international trade to protect the interests of politically important groups or promote the interests of key domestic producers. For example, In the United States agricultural subsidies have helped to protect relatively inefficient cotton farmer from being exposed to the full forces of competition in the global marketplace. The subsidies were put in place due to the political influence that cotton farmers exert on the United States Congress this unfortunate, for these subsidies have stimulated overproduction of cotton in the United States, which has driven down the price of cotton on world markets. Trade policy uses seven main instruments which is as below;

Import Quotas
Voluntary Export Restraints
Local content requirements
Administration policy
Anti dumping duties.

► Tariff

An import tariff is a tax collected on imported goods. Generally speaking, a tariff is any tax or fee collected by a government. However, the term...
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