Ibe International Business Questions Essay example

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Topic 1: International Business

1. Why companies engage in international business?
There are three major operating objectives that underline the reasons for companies to engage in international business:
-expanding sales: pursuing international sales usually increases the potential market and potential profits
-acquiring resources: foreign sources may give companies lower costs, new or better products, additional operating knowledge
-minimizing risk: international operations may reduce operating risk by smoothing sales and profits, preventing competitors from gaining advantages.

2. Identify three of the drivers of globalisation. Justify your selection supporting your argument with the use of examples.

3. Which
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Alan Rugman says ‘there’s no such thing as globalisation’. Discuss the evidence that Professor Rugman uses to substantiate his claim. Critically appraise the argument’s strengths and weaknesses.

Topic 2 Theories of International Trade
1. Do the results of empirical testing support the Heckscher-Ohlin, Factor Proportions Theories of trade?

2. What effects does trade in the Heckscher-Ohlin model have on the distribution of income and why?

3. Find some examples of industries in which a country specialisation has arisen as a result of the existence of a strong local preference for a product and show how the industry grew in the countries considered.

Topic 3: Regional Economic Integration. 1. List at least two disadvantages of global economic integration.
Trade Diversion: Because of trade barriers, trade is diverted from a non-member country to a member country despite the inefficiency in cost. For example, a country has to stop trading with a low cost manufacture in a non-member country and trade with a manufacturer in a member country which has a higher cost. National Sovereignty: Requires member countries to give up some degree of control over key policies like trade, monetary and fiscal policies. The higher the level of integration, the greater the degree of controls that needs to be given up
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