International business is all commercial transaction, private or government, between two or more countries. The companies carry out such transactions for profit; and governments may or may not do the same in their transactions
II. The importance of International Business
International business is the study of transactions that take place in abroad to meetthe needs of the individuals and organizations. These economic activities are commercial operations, as the case of export or import goods, direct investment of funds in international companies.
* About 80% of direct investment is carried out by the 500 largest companies in the world; represent over half of international trade.
* The study of international business mainly focuses on theactivities of multinational or transnational corporations based in one country but operating in another.
III. History of International Business
In recent years the international trade environment has changed dramatically. International business is an area that began to develop in the 1950s. At that time there were many multinationals and most of them were Americans. The Second World War hadended less than ten years and many nations, including Japan and the countries of the European Community, were more concerned with the reconstruction, that for the invest abroad.
During the 1970s and 1980s, international business changed dramatically. Economic growth in the countries of the European Community and Japan, coupled with the great progress made by several newly industrializednations, made to focus the attention in this field.
A. Globalization in International Business
The globalization process began after the Second World War, but accelerated in the eighties and especially in the nineties. The factors that contributed to the increasing globalization include:
1. The reduction of trade barriers and the growth of world trade.
2. The standardization of goods andservices and certain homogenization of tastes around the world.
3. The encogecimiento of geographical space. Improvements in telecommunications and transport substantially reduced long distance rates, costs and timing of international travel and the costs of air and ocean freight. The world seems smaller.
4. The collapse of communism and the end of the Cold War.
5. Related to the previoussection shows the global movement towards liberalism: political democracy and free market economics. This trend would lower the state's role in the economy and the recent privatization of the same.
6. The Third Industrial Revolution which involves dramatic changes in technology, organization and social and political relations
The task for developing countries it is doubly difficult. On theone hand have to bridge the gap that separates the developed world, the other must restructure their economies so as to remain competitive in the global economy.
Globalization is a multifaceted process. The statistics reflect it are:
* The volume of world trade.
* Trading in international financial markets.
* The trans-nationalization of companies.
* The internationalization ofinvestment.
IV. Macroeconomic development of Mexico
Following the global recession of 29:
a) International trade and capital markets severely affected
b) Reduction of export volumes of commodities
c) Change the growth strategy based on exports of primary products for another model known as the Growth Policy inward
There was economic growth, however:
* Inflation, for examplein 1948 was 78.35%
* Trade deficit
* Devaluation, for example in 1953 was 44.5%
* In 1970, it was noted that technology and productivity was vital and really that would be growth engine
* For 1980, questions the viability of the strategy
A. Exterior Trade of Mexico
The stabilization and adjustment policies implemented by the Mexican government during the 1980s caused a...