International Business Essay Example | Topics and Well Written Essays - 1000 words - 1

International Business - Essay ExampleThe Cold had ended, with the emergence of matchless single bloc. The world had become a single market place (Eriksen, pp.3, 2007). This was aided by the phenomena, globalization. Globalisation is undertaken as a reality, and Renato Ruggeriero has put it aptly, a reality that has overwhelmed all others (Scholte, pp.1, 2000). Globalisation has been aided by destitute administer and the increment of international businesses. What in essence is isolated trade? There argon non-homogeneous commentarys of chuck up the sponge trade free trade is trade that is not held up by national or international laws (Baggini, Fosl, pp.32, 2010). Globalisation is a term that is on everyones lips. However, moreover a few batch permit had a clear and definitive definition of the term. However, definitions form the basis of an individuals perceptions and evaluations (Scholte, pp.42, 2000). The definition of globalisation, according to the European Commission i s Globalisation can be defined as the process by which markets and production in opposite countries are becoming increasingly interdependent due to the dynamics of trade in goods and services and flow of capitals and technology (Held, pp. 92, 2000). In essence, increase trade, and international economic activity, faster communicating networks define globalisation. In a way, globalisation has led to the compression of the world. Due to this, the world has been brought closer, in different ways, for better or for worse (Eriksen, pp.4, 2007). The beginning of the paper will identify the benefits that have been brought due to increased trade and international business. The neo-liberals largely advocate the working of the free market, and in effect promote free trade. A very common theory that promotes free trade is that of relative advantage. This theory assumes that there are two countries in the world, each producing one single good. In a way, these two countries will only produce g oods in which they are better off, because it will be more profitable, and exchange the goods with each other. Therefore, comparative advantage theory is the rationale for free trade. For example, India and China have a comparative advantage in the production of clothing because of cheap labor. In addition, Japan has a comparative advantage in electronic equipment because it has a technological edge (Gitman & McDaniel, pp.73, 2008). David Ricardo gave this theory. Technically speaking, the consumption frontier of a country will deceit outside the production frontier of a company due to free trade (Thirlwall & Lopez, pp.7, 2008). In addition, another(prenominal) rationale for free trade has been the neoclassical factor endowment theory. This theory argues that it is not because of technological differences that free trade is required, but because different countries are endowed with different factor supplies (Todaro & Smith, pp. 560-565, 2003). In a sense, neoclassical thinkers sugg est that trade has provided nations with the opportunity to capitalize on those resources which are abundant (Todaro & Smith, pp 561, 2003) In addition, although globalisation has authorized much criticism, a closer look into statistics will also show that globalisation has created wealth and jobs. Because of globalisation, livings standards have greatly improved, because a large consumer market is created. International competition also keeps prices down, therefore keeping the take a chance of inflation quite low. For example, since 1997,