Last Updated 11 May 2020

Three possible levels of engaing in international trade

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International business involve transaction across national boundaries; i. e. business dealings involving partners or transactions from different countries. The globalize start of contemporary business world have the need for creating an atmosphere for international trade. This is adduced to the increase rate of information dissemination and improvement of technology such the internet and means of transportation. According to Grimwad (2000) “A major cause of the growth in output has been the rapid growth of world trade.

Throughout this period, world trade consistently grew faster than world output. This, in turn, was the result of a major increase in the degree of international specialization between countries. An increase in the degree of specialization would result in an increase in world trade even with no increase in world output”. International trade can take three dimension: 1. through activities multinational corporations 2. through global financial institutions 3. through the exportation and importation of goods

The activities of multinational corporations expands across their parents home country to other countries which host them. In the course of expansion of business as result of increase capital outlay, some business organization transform to Multinational Corporation, where they invest in other countries and establish a new outlay of their business. Such transaction involves the maximization of profits from the subsidiaries organization and repatriating it to the parents country where the main establishment is situated.

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Example of organizations operating as multinational corporations include: Shell BP; with many organization branches in oil producing nations like Saudi Arabia, Nigeria, Libya etc. McDonalds company; it have many eatery organizational branches in over 100 countries. Hilton International; having hotels pning across many countries. These are few among many multinational corporations Another form of engagement in international trade is through the utilization of services of global financial institutions.

In order to partake in international business transaction the support of International financial institutions are required to ease the mode of transacting business. International Financial institutions like World Bank And International Monetary Fund (IMF), have greatly supported international Business and encouraged governments of different countries to adopt free trade and open economy to allow the growth of international trade. So utilizing the services of these International financial institutions are an avenue of dealing in international trade and transactions.

The third form of engaging in international business is through the importation and exportation of goods and services. Many business organizations import raw materials from other countries and finished goods and even services of specialized form. And also some organization engage in the exportation of finished goods or raw material, and some times services to consumers and buyers in other countries this has promoted the activities of business transaction especially at the global level.

REFRENCE Grimwade, Nigel (2000), international Trade: New Patterns of Trade, Production & Investment. London: Routledge p1.

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Three possible levels of engaing in international trade. (2018, Oct 06). Retrieved from https://phdessay.com/three-possible-levels-of-engaing-in-international-trade/

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