Global Economy

The term "global economy" refers to the totality of economic activity that take place both within and
across states. Every nation is a unique entity with its own industrial production, labor market, financial
market, resources, and environment.

Because trade allows countries to access any resource they want, regardless of whether it is produced
domestically or abroad, it is essential to the health of the global economy. The resources are accessible
in part due to the simplicity of trading.

All economies can now be connected thanks to the globalization, a phenomena that has taken hold all
over the world. Due to the fact that they are no longer constrained by national borders, firms can now
engage in a wide range of commercial operations throughout the world.

International Business

International business is the term used to describe cross-border exchanges of goods, services, or
resources between two or more states. Trade of economic resources including capital, know-how, and
labor occurs in all financial, banking, insurance, and building transactions. Operational requirements,
such as the availability of materials, tools, and technology as well as the disposal of surplus output, fall
into two categories: operational and strategic. Strategic needs include ensuring resistance to future
changes in the external environment, sustainable growth (keeping up previous trends of growth,
avoiding saturation-related decline, expanding the volume of business, and boosting the pace of
expanding), and strategic needs consist of ensuring resistance to future.

A process by which national and regional economies, civilizations, and cultures have become more
integrated is referred to as the "global network of trade, communication, immigration, and
transportation." These changes have an impact on the development of the global economy. Because of
the global economy and globalization, domestic economies have become more stable, which has
enhanced their performances.

Trading Internationally

On the worldwide trade, globalization is supposedly having an impact. The phrase "trade" refers to the
movement of commodities and services between countries, and it has also facilitated the specialization
of countries in fields where they have comparative advantages. According to this theory of economics,
an economy's ability to produce goods and services at a lower opportunity cost than its trading
competitors is referred to.

Financing Internationally

Since money can be exchanged between countries more quickly than goods, services, and people, it is
one of the key features of a global economy. Themes in international finance include things like
monetary policy and currency exchange rates.

Worldwide Investments
Global investment is a term used to describe an investment strategy that is not restricted by regional
boundaries. The most common type of investment undertaken globally is called foreign direct
investment (FDI).

Trading Associations

Even if they rarely conduct business internationally, trade associations that are arranged according to
sectors of the economy or specific products have a considerable impact on costs, sales, output, and
technology. Trade associations are at the core of their respective fields. They act as the "industry voice,"
advocating on behalf of their members' interests before the government, regulatory organizations, the
media, and other decision-makers. It is the duty of a trade association to create rules and provide
thorough information to companies engaged in a certain industry. Each company collaborates with the
others to find solutions to difficulties that pertain to the industry, some of the trade associations are;

WTO

World Trade Organization contributes to maintaining peaceful trans-boundary trade while also resolving
disputes amongst the involved nations. Without WTO, it is impossible to conceive international trade.
The rules established by the WTO must be followed by all participating countries.

Apec

Economic Cooperation in the Asia-Pacific, The Asia-Pacific Economic Cooperation (APEC) guarantees a
free flow of goods, services, investment, and people across international borders. Participants
encourage this trade by expediting the customs clearance procedure at border crossings, enhancing the
business climate on the opposite side, and synchronizing laws and regulations in the region.

Asean

Southeast Asian Nations Association, In accordance with the Association's Declaration, its goals and
objectives are to: (1) promote the economic, cultural, and social development of the region; and (2)
promote peace and stability in the region by ensuring that member state relations are based on the
fundamental principles of human rights and the rule of law.

OECD

The governments of 37 democracies with economies based on markets collaborate to develop standards
for public policy that will promote sustainable economic growth in the Organization for Economic Co-
operation and Development (OECD), an exclusive forum. In the OECD's framework, governments may
contrast their experiences, look for answers to common issues, identify standards of excellence, and
establish strict guidelines for economic policy.

Trade Barriers

There are times when nations erect barriers to commerce. Trade tariffs (import levies) and trade quotas
(limitations on the number of goods that can be imported into a country) are examples of these
obstacles. In the long run, it becomes challenging to maintain the use of such barriers because they
frequently have an adverse effect on the economy of trade nations. The detrimental effects of a trade
barrier include hindering free trade, favoring affluent nations, restricting product possibilities, rising
prices, lowering net income, decreasing employment, and lowering economic production, among the
various kinds of barriers are;

Tarrifs: they are levied against things that are imported. Tariffs are a popular weapon used by
governments to defend their domestic providers from less expensive foreign goods.

Non-Tariff: Non-tariff barriers are any measures that impede international trade but are not customs
tariffs. Among them are laws: any laws that outline how a product may be made, handled, or advertised.
Origin regulations: laws that require proof of the country where an item was created.

Quotas: The amount of a commodity that may be imported into a country is restricted by quotas, a type
of trade restriction. Although there is no distinction between a quota and a tariff, the government
makes money from tariffs while exporting businesses do so through quotas.

Effect of trade restrictions

Due to limits on importing cheap international raw materials, trade barriers force firms to rely greater
amounts on domestic products. This raises the cost of doing business. People are discouraged from
buying them at the local market because it has an immediate impact on the final cost of goods and
services.

Reducing Trade Barriers

One of the most obvious methods for promoting commerce is to lower trade barriers.

Governments of different nations may negotiate free trade agreements to promote smooth trade. The
most popular approach to reducing trade restrictions is this one. State-to-state agreements known as
free trade agreements follow international standards and lower trade obstacles.

Conclusion

In today's world, the phrase "international company" is frequently used to refer to actual business deals
and extensive relationships involving numerous people from different countries and thought processes.
A thorough thought process and a difficult decision-making process are required when investing abroad.
Two processes and approaches are employed to carry out this process: long-term comprehensive
analysis and a scanning of the recently picked investment area. The majority of economists agree that
trade restrictions hurt the economy overall and decrease economic efficiency. A concept that can be
used to explain is competitive advantages. Theoretically, free trade advocates for the abolition of all
such constraints, with the possible exception of those deemed crucial for the general welfare.

References
Katerina, R. & Aneta, R., (2020) The imapact of Globalization on the business, Faculity of
Economics, Vol. 47, 83-89.
Cavusgil, T., Knight,G., Riesenberger, J. (2008). International Business: Strategy, Management
and the new realities, Prentice Hall.
Baretels, L. F., Buckley P., Mariano G. (2019) Multinational Enterprises, Foreign Direct
InvestmentLocation Decisions within The Global Factory.
Kyove J., Streltsova, K., and Odibo, U., (2021) Globalization impact on Multinational
Enterprises,Facilty of Ecnomics, 2(2), 216-230.