International Trade

In the global landscape, Economic Integration usually can be classified into various additive levels. Regional Economic Integration (Preferential Trade Agreement) The WTO promotes free trade on a global basis, however countries in each of the world’s regions are seeking to liberalize trade within their own regions. Preferential trade agreement (PTA) is a mechanism that confers […]

The success of a global strategy is influenced by the selection of an appropriate organizational structure to implement that strategy. The ideal structure of such as an organization should be a function of: the products and services to be sold in a marketplace the external and internal environment Theoretically, the way to develop a global […]

“Internationalization” is the term we use for a firm’s expansion from its domestic market into new markets abroad. Today most large companies operate outside their home markets. Let’s understand the motives behind a company’s decision to compete in global markets, and the right time to internationalize. Motives for Internationalization Internationalisation refers to the process in […]

Put simply, Free trade is international trade where there are no government policies restricting the import and export of goods and services. While economists consider this as the best approach to maintain a healthy global economy, this is more of a theoretical policy become some restrictions do exist. Free trade means importing and exporting without […]

A special economic zone (SEZ) is an area within a country that has business-friendly trade and business laws and is subjected to different economic regulations from the rest of the country. SEZs are set up to boost economic activity, promote exports, boost investments, develop infrastructure as well as create employment opportunities. Special Economic Zone (SEZ): […]

Comparative Cost Advantage is a situation in which a country, individual, company or region can produce a good at a lower opportunity cost than a competitor. The Country concentrates on producing what they are good at and export the surplus. Import from other countries those goods that other countries are better able to produce than […]

Understand the importance and characteristics of global production chains. Understand the political, economic, ethical and social issues raised by the existence of global production chains. Understand the nature of employment and labor rights in identified emerging economies. What are Global Value Chains? (GVC) Global value chains are the fragmented cross-border stages, people and activities required […]

Globalization refers to the increasing integration of economies around the world, particularly through trade and business. This resource guide helps understand globalization and key related concepts. Globalization is providing us with new realities that firms have to take into account when doing business globally, irrespective of whether Globalization poses a threat or a opportunity to […]

There are benefits to free trade, but some parties could lose out as well; that is why governments may feel the need to interfere and regulate certain aspects of the trade. Let’s understand why governments control trade and identify methods governments use to control trade. Introduction to Trade Tariffs Tariff refers to taxes or duties levied […]

With increased globalization, many companies see the benefits of engaging in international trade; there’s opportunity to earn more revenue and to place your products and services in front of a wider audience. However, a business should also weigh in the risks associated with international trade. While one can mitigate most of these risks, certain risks […]

Understand the various theories of trade that explain why countries should trade, understand the factors affecting countries’ trade patterns, and understand how global efficiency is increased through free trade. What Trade theory is important? Trade theory helps managers and government policymakers focus on three critical questions: What products should be imported and exported? How much […]

Foreign Direct Investment (FDI) explained. Understand concepts, key terms, and also find case studies related to FDI. These terms are commonly used while talking about FDI. MNCs/MNEs – nomenclature of foreign business FDI-inward/outward Domestic/ cross border business Subsidiaries / affiliates / parent company Home country / host country Rankings / indexes- Ease of doing business […]

The US-China trade war has been escalating for some time now, especially after the Covid-19 pandemic. More companies are planning to diversify their supply chain after the Covid-19 pandemic crippled their business. Also, it’s getting too bureaucratic to be a foreigner in China and hence companies are looking to move to other countries in Asia […]

What is WTO (World Trade Organization) and its importance in international trade. Introduction to WTO The World Trade Organization (WTO) is a global body that deals with the rules of trade between nations. The WTO strives to ensure trade flows as freely and predictably as possible. WTO replaced the GATT. GATT = General Agreement on […]

In international trade, most-favored-nation (MFN) treatment means a policy of non-discrimination towards all the WTO members. Although the name implies favoritism and exclusive trading privileges toward one particular nation, it actually means equal treatment of all member countries. So, for example, if a country reduces tariffs by 5% for one nation, the MFN clause says […]

The distribution of wealth and capacity to generate incomes in the world can be captured in the form of an economic pyramid, known as the BOTTOM OF THE PYRAMID (BOP) – Prahalad 2005. At the top is the rich and at the bottom is the poor (BOP). The general assumption is that the poor have […]