Chapter 2 Global Business
Chapter 2 Global Business
International ■ International trade balanceS. GATT WTO International business International marketing International finance Exchange rate, capital movements International investment FDI mncs
International ◼ International Trade ◼ balances, GATT, WTO ◼ International Business ◼ International Marketing ◼ International Finance ◼ Exchange rate, capital movements ◼ International investment, FDI, MNCs
The Basis for International Business International business All business activities that involve exchanges across national boundaries Some countries are better equipped than others to produce particular goods or services ■ Absolute advantage The ability to produce a specific product more efficiently than any other nation Comparative advantage The ability to produce a specific product more efficiently than any other product Goods and services are produced more efficiently when each country specializes in the products for which it has a comparative advantage
The Basis for International Business ◼ International business ◼ All business activities that involve exchanges across national boundaries ◼ Some countries are better equipped than others to produce particular goods or services ◼ Absolute advantage ◼ The ability to produce a specific product more efficiently than any other nation ◼ Comparative advantage ◼ The ability to produce a specific product more efficiently than any other product ◼ Goods and services are produced more efficiently when each country specializes in the products for which it has a comparative advantage
The Basis for International Business(cont'd a Countries trade when they each have a surplus of the product they specialize in and want a product the other country specializes in Exporting Selling and shipping raw materials or products to other nations Importing Purchasing raw materials or products in other nations and bringing them into ones own country
The Basis for International Business (cont’d) ◼ Countries trade when they each have a surplus of the product they specialize in and want a product the other country specializes in ◼ Exporting ◼ Selling and shipping raw materials or products to other nations ◼ Importing ◼ Purchasing raw materials or products in other nations and bringing them into one’s own country
Top Ten Merchandise-Exporting States Billions of dollars, 2005 merchandise exports Texas $128.8 California $116.8 New York $50.5 shington $380 Michigan $376 Illinois $360 Ohio $350 Florida $334 Total 2005 U.S. exports Pennsylvania $223 $904. 4 billion Massachusetts $220 Source http://www.ita.docgov/td/industrylotealstate/2005year_enddollar_value_05.html, accessed september 15, 2008
Top Ten Merchandise-Exporting States Source: http://www.ita.doc.gov/td/industry/otea/state/2005_year_end_dollar_value_05.html, accessed September 15, 2008