International Business

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International Business refers to business activities that take place across national frontiers. It includes not only trade in goods and services, but also production, marketing, foreign investments, l…

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The fundamental reason is that countries cannot produce equally well or cheaply all that they need. This is due to: 1. Unequal distribution of natural resources 2. Differences in productivity levels 3…

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1. **Nationality of participants**: Domestic - same country; International - different countries 2. **Factor mobility**: Higher within country; Lower between countries due to legal and cultural barrie…

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Merchandise Trade refers to trade in tangible goods - those that can be seen and touched. It includes: **Merchandise Exports**: Sending tangible goods abroad (e.g., textiles, machinery, food products…

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Service Trade involves trade in intangibles - also called 'Invisible Trade'. Major categories include: 1. **Tourism and Travel**: Hotel services, sightseeing 2. **Transportation**: Shipping, airlines…

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**Foreign Direct Investment (FDI):** - Direct investment in properties like plants, machinery in foreign countries - Provides controlling interest in foreign company - Investor gets involved in produc…

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Licensing is a contractual arrangement where one firm (licensor) grants access to its patents, trade secrets, or technology to another firm (licensee) in a foreign country for a fee called royalty. *…

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**Similarities**: Both involve granting rights to use technology, trademarks in exchange for fees **Key Differences**: 1. **Application**: Licensing - goods and manufacturing; Franchising - service b…