mg2005 lecture 1- international business

core definition of international business

IB involves firms engaging in cross border economic activity or the general process of doing business abroad

trade definition

the exchange of goods and services via exporting and importing

investment

the transfer of assets to another country or aquisition of assets in a foreign country

protectionism and war 1915-1945

a significant retreat from global trade

hyper globalistion (1990-2005)

rapid expansion of global trade

US - China

characterized as decoupling but still far from decoupled

EU - Russia

all flows have reduced significantly following recent tensions

trade blocs

countries have become more likely to trade within there own blocs, trade between different blocs has fallen slightly

the big mac index

this tool uses purchasing power parity (PPP) to suggest what exchange rates should be used on local prices for a example a big mac helps estimate if currency is under or over valued relative to another country

globalization of production

modern products for example beoing aircraft are assembled using components from dozens of countries

tarrifs and trade wars

recent news highlights threats of steep tariffs which can lead to trade wars and retaliatory measures from partners like canada and mexico