Int. Trade is the exge of goods and services among the citizens of independent or sovereign states or countries.

Mercantalism prevailed in 16th to 18th centuries. They supported self sufficiency and they advocated ctries to increase export and decrease import Thus acquire maximum foreign exchange in the form of gold

The first phase of global trade began around 1870 and ended with the world war I (1914) Started with industrial revolution in UK Colonial empires were prevailing The ratio of trade to GDP was as high as 22.1 in 1913 But later ctries started imposing trade barriers to protect their domestic trade and pdn, thus GDP ratio reduced to 9.1 during 1930

Advanced ctries faced serious problems b/c of these trade barriers. Added to this there was break down of gold standard also, which affected international trade Thus world nations felt the need for international co-operations in global trade This resulted in the establishment of International Monetary Fund(IMF) and International bank for reconstruction and development(IBRD /WORLD BANK)

Advanced ctries faced serious problems b/c of these trade barriers. Added to this there was break down of gold standard also, which affected international trade Thus world nations felt the need for international co-operations in global trade This resulted in the establishment of International Monetary Fund(IMF) and International bank for reconstruction and development(IBRD /WORLD BANK)

Originally , the producers used to export their products to near by countries and gradually they extended the exports to far-off countries Companies also extended the operations beyond trade

The MNCs those who were producing products in their home countries and marketing them in various foreign countries before 1980s, started locating their business and plants and other manufacturing facilities in foreign/ host countries.

Stages

Influences

Goals

Domestic Business

International Business

Advantages

Approaches

Influences

Problems

Characteristics of international business: Accurate Information or appropriate decision making Timely Information Size of the business should be large in order to have impact on global economies Geographic Market segmentation Potentiality of the international markets compared to domestic market Wider scope Inter country comparative study to evaluate markets

Host countries monetary system National security policies of host country Cultural factors Language Nationalism and business policies

To achieve higher rates of profit Expanding the pdn capacities beyond the demand of domestic country Severe competition in the home country Limited home market Political stability and political instability Availability of technology and managerial competence High cost of transportation

Nearness to raw materials Availability of quality human resources at less cost Liberalization and globalization To increase market share Direct investment to avoidtarffs and import quotas