Module 1- International Business and Trade PDF

National University- Baliwag School of Business and Accountancy MODULE 1: INTRODUCTION TO INTERNATIONAL BUSINESS AND TRADE BBINTBTX: INTERNATIONAL BUSINESS AND TRADE  LEARNING OUTCOMES 1. Define and explain the concept of mercantilism, its historical si...

National University- Baliwag School of Business and Accountancy MODULE 1: INTRODUCTION TO INTERNATIONAL BUSINESS AND TRADE BBINTBTX: INTERNATIONAL BUSINESS AND TRADE  LEARNING OUTCOMES 1. Define and explain the concept of mercantilism, its historical significance, and its implications on international business and trade. 2. Analyze the principles and processes involved in international business transactions, including the identification of key stakeholders, negotiation strategies, and legal considerations. 3. Evaluate the interplay between international trade and trade policy, examining the role of tariffs, quotas, and trade agreements in shaping global commerce, and how they impact businesses and economies worldwide. MERCANTILISM  MERCANTILISM Mercantilism was an economic system that aimed to increase a nation's wealth and power by controlling trade and accumulating precious metals. MERCANTILISM  MERCANTILISM Amount of wealth in the world is steady A country counts their wealth by the amount of gold and silver in their stock Mercantilists favor exports but restrict the imports The value of country’s population was seen as a key to self-reliance and state power. The role of a leader was seen as the dominant role to lead his country to welfare ADAM SMITH’S WEALTH OF NATIONS The term mercantilism didn’t exist until 1763 by Victor de Riqueti, Marquis de Mirabeau, but it was popularized by Adam Smith in his book “The Wealth of Nations” in 1776. ADAM SMITH’S WEALTH OF NATIONS ADAM SMITH’S WEALTH OF NATIONS INTERNATIONAL BUSINESS TRANSACTIONS  WHY DOES A BUSINESS EXPAND ABROAD? Why does a business expand abroad? Increasing turnover and profit Creating new markets Strengthening the business’ reputation in international level Ensuring the sourcing of raw materials  INTERNATIONAL BUSINESS International business encompasses all commercial activities that take place to promote the transfer of goods, services, resources, people, ideas, and technologies across national boundaries.  INTERNATIONAL BUSINESS International business occurs in many different formats: The movement of goods from country to another (exporting, importing, trade) Contractual agreements The formation and operations of sales, manufacturing, research and development, and distribution facilities in foreign markets INTERNATIONAL BUSINESS LAW  INTERNATIONAL TRADE AND POLICY  INTERNATIONAL TRADE There are two main reasons for why states trade with each other: ECONOMIC POLITICAL REASONS REASONS INTERNATIONAL TRADE LAW  INTERNATIONAL BUSINESS VS. INTERNATIONAL TRADE  International business comprises all commercial International trade is the transactions that take place exchange of capital, goods, between two or more and services across regions, countries and international borders or nations beyond their territories. political boundaries. It is much a It is much a narrow broader concept set of activities and and includes consists of exports international trade. and imports only.  THE RISE OF GLOBALIZATION GLOBALIZATION Globalization is a term used to describe how trade and technology have made the world into a more connected and interdependent place.  GLOBALIZATION People, money, material goods, ideas, and even disease and devastation have traveled these silken strands, and have done so in greater numbers and with greater speed than ever in the present age.  GLOBALIZATION When did globalization begin? Many scholars say it started with Columbus’s voyage to the New World in 1492. People traveled to nearby and faraway places well before Columbus’s voyage, however, exchanging their ideas, products, and customs along the way.  GLOBALIZATION Worldwide interconnectedness in all aspects of the contemporary social life. It is a multidimensional phenomenon. Economic dimension is one of the major driving force.  THE U.S. POSITION IN INTERNATIONAL TRADE Because of its size and interconnectedness, developments in the US economy are bound to have important effects around the world. The US has the world’s single largest economy, accounting for almost a quarter of global GDP (at market exchange rates), one- fifth of global FDI, and more than a third of stock market capitalisation. Largest economies in the world by GDP (nominal) in 2023 It is the most important export destination for one-fifth of countries around the world. The US dollar is the most widely used currency in global trade and financial transactions, and changes in US monetary policy and investor sentiment play a major role in driving global financing conditions (World Bank 2016). The US remains a major participant in international trade and foreign investment. The country (US) is the world's second largest exporter of goods and services, behind only China. Its top export categories include aircraft, machinery, electronic equipment, and pharmaceuticals. Meanwhile, the US is the major importer of goods and services, with top import categories including automobiles, crude oil, and electronics At the same time, the global economy is important for the US as well. Affiliates of US multinationals operating abroad, and affiliates of foreign companies located in the US account for a large share of US output, employment, cross-border trade and financial flows, and stock market capitalization.  ACTIVITY Create a maximum of 1-minute video presentation of yourself expressing your ideas about the current status of the Philippines in the international market. Criteria/Rubrics for Evaluation: 1.Content (40 points): 1.Accuracy of information provided. 2.Clarity in explaining economic growth, challenges, and investment opportunities. 3.Relevant examples and data to support statements. 2.Delivery (30 points): 1.Confident and engaging presentation style. 2.Clear and articulate speech. 3.Effective use of body language and gestures. 3.Structure (15 points): 1.Logical flow of ideas from introduction to conclusion. 2.Smooth transitions between main points. 4.Visuals (15 points): 1.Use of relevant images, charts, or graphs to enhance understanding. 2.Visuals should complement the spoken content. ADVANCED READINGS Research and have advanced readings on the following: CULTURE AND BUSINESS/WORLD ECONOMIES The Role of Culture in International Business Various Elements of Culture