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International Business - Research Paper Example

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International Business

Geographic positioning of the countries in the globe causes production of agricultural products and mineral related product to vary depending on the country. Countries located in the equatorial highlands in America and Africa highly depend on agriculture while countries located in the Arabian deserts produce oil products. The difference in production between the countries results in the need for trade (Morrissey 699). The common character that signifies third world nations comprise of agriculture dependent nations. The developed nations deal with service industry and trade in machines. The trade between developed and undeveloped nation enables the developed nations to obtain crucial machines and services that they do not produce. The developed nations purchase agricultural products in their raw form which are later processed and resold in the country or to other countries. There is a significant difference in the commodities traded in the international market. Raw agricultural produce fetches the country less income compared to finished goods and services sold by the developed nations. The big gap between the commodities traded is reflected in the balance of trade. ...
B2B refers to the sale of commodities between two business entities. This channel of distribution attracts low profit but is convenient for the seller. B2C channel of distribution involves businesses having outlets in the countries they conduct trade. This channel of distribution attracts high profit but requires the involvement of the business man compared to B2B. Most developed nation prefers the B2C to B2B channel of distribution which explains the surplus in trade (van de Klundert 208). Free trade refers to an agreement between two countries to ensure that trade regulations are abolished with regards to the legal products traded. Free trade has been adopted by some countries where the developed nations have set up export processing zones to attract investors. The country benefits from employment of citizens in the export processing areas as tax restrictions are reduced in the export processing zones. Terms of trade refer to another international trade term which refers to the rate of exchange of an import for an export. Exchange rare refers to the valuation of currency depending on the economic growth of a country. International trade affects the budget of the country and has to be monitored to avoid economic slumps (Baffes 427). The gap between the developed nations and the developing nations needs to be bridged to ensure stability in the global economy. Some economists blame the immense gap to the free trade between the two dissimilar economies. The difference in trade has caused the developing nations to lose out in the trade as their commodities retail for lower prices and the export cost more. The result has been unbalanced trade between the nations with developing nations having trade ...Show more

Summary

Professor Surname International business- imports/exports Introduction International business can be blamed for the big gap between the developed and developing nations. International trade refers to trade between two countries who have agreed to burn trade regulations with regards to the products traded…
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