Podcast
Questions and Answers
Which theory suggests that a country should produce goods where it has an absolute cost advantage?
Which theory suggests that a country should produce goods where it has an absolute cost advantage?
What is a key function of the World Trade Organization (WTO)?
What is a key function of the World Trade Organization (WTO)?
Which entry mode involves a long-term partnership where two companies share resources for a common goal?
Which entry mode involves a long-term partnership where two companies share resources for a common goal?
Which is NOT a type of Forex exposure?
Which is NOT a type of Forex exposure?
Signup and view all the answers
What does GATT stand for?
What does GATT stand for?
Signup and view all the answers
What function does the ECGC serve in international finance?
What function does the ECGC serve in international finance?
Signup and view all the answers
Which of the following is a common stage in the globalization process?
Which of the following is a common stage in the globalization process?
Signup and view all the answers
What is an example of a non-tariff barrier in international trade?
What is an example of a non-tariff barrier in international trade?
Signup and view all the answers
Study Notes
Module I: Introduction to International Business
- International Business Nature and Scope: A broad field encompassing activities across national borders.
- International Business Environment: The external factors influencing business operations in multiple countries.
-
Classical Trade Theories:
- Absolute Cost Advantage: Focuses on a nation's ability to produce a good more efficiently than another.
- Comparative Cost Advantage: Emphasizes specializing in producing goods where a nation has a lower opportunity cost.
- Modern Trade Theories: More intricate, including factors like economies of scale and product differentiation impacting international trade.
- Porter's Diamond Model: Analyzes a nation's competitive advantage based on factors like firm strategy, structure, and rivalry.
- Globalization: A multifaceted process with various dimensions and stages, including economic, political, and cultural integrations across nations.
- Forces Driving Globalization: Technological advancements, reduced barriers to trade (e.g., through trade agreements), and interconnectedness of markets.
- Contemporary Issues: Current challenges and trends in international business.
Module II: International Business Environment
-
Trade Barriers:
- Tariff: Taxes imposed on imported goods.
- Non-Tariff: Non-tax barriers like quotas, or other regulations
-
GATT and WTO: Organizations promoting international trade through agreements and dispute resolution.
- GATT: Predecessor to WTO, focused on reducing trade barriers.
- WTO: Handles trade disputes, monitors trade policies, and promotes fair trade practices.
- Ministerial Conferences: Key meetings of WTO members; crucial for shaping global trade.
- WTO Dispute Settlement Mechanism: The method to settle disputes and protect trade rights.
-
Regional Integration:
- Trade Blocks: Groups of nations cooperating for economic advantages through reduced barriers.
- Arguments for: Increased trade, economic growth, political stability;
- Arguments against: Potential for trade diversion, and negative impacts on non-members.
Module III: Modes of International Entry
-
Entry Modes: Methods for companies to conduct business in foreign markets, including:
- Exporting
- Licensing
- Franchising
- International Agents/Distributors
- Cross-border Mergers & Acquisitions
- Strategic Alliances
- Joint Ventures
- Overseas Manufacture
- International Sales Subsidiaries
- Outsourcing
- FDI (Foreign Direct Investment)
- FII (Foreign Institutional Investment)
Module IV: International Financial Management
- International Monetary System: The framework for international monetary cooperation and exchange rates.
-
Exchange Rate Systems:
- Floating: Market-determined exchange rates.
- Fixed: Exchange rates pegged to a particular currency.
- Financial Markets and Instruments: Instruments utilized in international finance.
-
Export/Import Finance: Methods and processes related to financing international trade.
- ECGC: Export Credit Guarantee Corporation of India.
- EXIM Bank: Export-Import Bank of India.
-
Methods of Payment: Different methods used in international trade payments.
- Letter of Credit
- Banker's Acceptance
- Draft
Module V: Forex Exposure
- Country Risk Analysis: Assessing economic, political, and social risks of a country.
-
Forex Exposure Types:
- Accounting: Currency shifts impacting financial statements.
- Operating: Changes in prices and costs due to currency fluctuations.
- Transaction: Currency movements during contracts, invoicing, etc.
- Exposure Management: Methods for anticipating and mitigating these risks.
- Interest Rate Exposure: Risks associated with fluctuations in interest rates.
Module VI: Foreign Trade Procedure
- Foreign Trade Policy: Government regulations governing international trade, including FDI and FIIs.
- Foreign Trade Policy 2015-20: Regulations during specific period, which influenced different economic sectors.
- Documentation: Types of documents required by government agencies.
- Export Contracts and INCO Terms: Contracts and agreed-upon conditions influencing international trade.
- Export Order Processing: Step by step process to export items.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on the fundamentals of international business with this quiz. Explore essential concepts such as trade theories, globalization, and competitive advantage as outlined in Module I. Challenge yourself with questions that cover both classical and modern trade theories, as well as the international business environment.
