Impact Of Globalization On International Business

828 WordsOct 4, 20174 Pages
Globalization has influenced the way our world works today. This is the process of international business. Many of the items we are using at this very moment are imports, products produced in another country. Many businesses today rely on exports, products produced in their home country and shipped to other nations. Every country relies on imports and exports. Wether a firm is expanding to another nation or uses imported goods, international business is always involved and will affect the business model. Factors that will affect and alter the international marketplace such as, trade agreements and alliances, exchange rates, and foreign competition. International business is increasingly popular for businesses as technological advances…show more content…
The EU does not include all European nations, but does include the majority of the nations. The Association of Southeast Asian Nations (ASEAN) was founded as an organization for economic, political, social, and cultural cooperation between the nations in the association. ASEAN does not have the same impact in the global market as NAFTA or the EU. These trade agreements and alliances have allowed nations to grow and become more efficient. The international environment in which the business is operating is very important. The import-export balances, exchange rates, and foreign competition all alter and affect trade. The import-export balance is the acceptable balance of imports and exports in a country. It is measured by the balance of trade and balance of payments. The balance of trade is the difference between a country’s imports and exports, which can result in a trade deficit or trade surplus. The balance of payments is the flow of money in and out of the country. The exchange rate is the rate at which a nations currency can be exchanged for another nations currency. When the exchange rate fluctuates, it can have a large impact on a country’s balance of trade. If the exchange rate moves in a way that domestic currency strengthens, exports will end up costing more when in foreign currency. This will lead to foreigners finding other options and exports will decline. At the
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