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International Business


International Business
International business refers to the trade in goods and services along with the exchange of capital, technology, skills and patents that takes place across national boundaries.

Scope of International Business
Component of international business Meaning
Merchandise exports and imports Trade in tangible commodities
Service exports and imports (invisible trade) Trade in intangible commodities
Licensing and franchising Allowing a foreign company to produce and sell goods using the logos and trademarks of the domestic company in return for a fee
Foreign investment Investments that are made outside a country with the objective of earning returns  

International Trade
International trade refers to only the exchange of goods and services across the boundaries of countries.
Characteristics of international trade
i. There must be an involvement of at least two countries between which the exchange of goods and services takes place.
ii. International trade involves payment being made and received in terms of foreign currency.
iii. It is usually a time-consuming process because of such factors as wide geographical distances, procedural formalities and barriers to trade.  
iv. A large set of legal formalities and restrictions, such as import licence and export clearance, must be completed before international trade can begin.
v. International trade is exposed to various types of risks, such as risk of loss of goods during transit, fluctuations in prices of goods and fluctuations in the exchange rate.

Differences between International Trade and International Business
Points of difference International trade International business
Definition Refers to only the exchange of goods and services across the international boundaries of coun…

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