Introduction

International business comprises all commercial transactions like private and governmental, sales, investments, logistics, and transportation and others, that take place between two or more regions, countries and nations beyond their political boundaries. Usually, private companies undertake such transactions for profit, governments undertake them for profit and for political reasons.The term "International Business" refers to all those business activities which involve cross-border transactions of goods, services, resources between two or more nations. Transactions of economic resources include capital, skills, people etc. for international production of physical goods and services such as finance, banking, insurance, construction etc.

What is International Business?

International Business is an interdisciplinary major focusing on the convergence of peoples, cultures, and markets in what is now the a global world.

International business may be defined simply as business transactions that take place across national borders. This broad definition includes the very small firm that exports (or imports) a small quantity to only one country, as well as the very large global firm with integrated operations and strategic alliances around the world. Within this broad array, distinctions are often made among different types of international firms, and these distinctions are helpful in understanding a firm's strategy, organization, and functional decisions. One distinction that can be helpful is the distinction between multi-domestic operations, with independent subsidiaries which act essentially as domestic firms, and global operations, with integrated subsidiaries which are closely related and interconnected. These may be thought of as the two ends of a continuum, with many possibilities in between. Firms are unlikely to be at one end of the continuum, though, as they often combine aspects of multi-domestic operations with aspects of global operations.

International business grew over the last half of the twentieth century partly because of liberalization of both trade and investment, and partly because doing business internationally had become easier.

In terms of ease of doing business internationally, two major forces are important:

Technological developments which make global communication and transportation relatively quick and convenient.

The disappearance of a substantial part of the communist world, opening many of the world's economies to private business.

Types of operations:

Exports and imports of merchandise:

Service exports and imports.
Merchandise exports: goods exported, not including services.
Merchandise imports: The import goods are the ones brought into a country.
Service exports and imports are no product purchasing. It only about services. Services exports and imports can be divided into three most important categories.
"Tourism and transportation, service performance, asset use".
Exports and Imports of products, goods or services are usually a country’s most important international economic transactions.

Why is important International Business?

The cost of labor in China, India and other parts of the world is lower than developed nations, and they can manufacture items at a lower price point. Even after factoring in the cost of transportation, the products they manufacture as less expensive, and people around the world pay less as a result. International trade facilitates these savings.

The United States, Japan and much of Western Europe, on the other hand, have well-educated employee bases and the infrastructure needed to innovate and create new products. These products are primarily used in the developed world, but they provide benefits to developing nations as well. Inexpensive computers, for example, allow people in poorer nations to access the Internet.

However, international trade can cause short-term and long-term problems. The developed world no longer has as many low-skill manufacturing jobs as it once did. In addition, developing nations are less likely to invest in research and development, as they cannot spend as much as companies in richer nations. However, the cost savings and innovations provided by international trade are widely believed to make up for these problems.