International Business and
Environment Management
Presented By
International Business and
Environment Management
Topics
Trade and Investment
Government Influence on Trade
Trading Partners
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Trade
Definitions:
• Buying and Selling
• Trade is the voluntary exchange of goods,
services, or both.
• International trade is a exchange of
capital, goods and services across
international borders and territories
Trade Theories
• Absolute cost.
• Comparative cost.
• Opportunity cost.
• Factor endowment.
• Complementary trade.
Terms of Trade
• Gross barter trade.
• Income trade.
• Single & Double factoral.
• Real cost terms.
• Utility terms.
Trade Policy
• Free trade policy :
Free trade is a system of trade policy
that allows traders to act and transact
without interference from government.
• Protection policy :
Protection policy is a system of trade
policy that allows traders to act and transact
with interference from government.
Gains From Trade
• Competition
• Comparative Advantage
• Improvements in dynamic efficiency
• Trade is seen as stimulant to short term
aggregate demand and long term economic
growth
Trade Blocs
• EU (European union)
• South-South Cooperation
• SAARC (South Asian association For
regional Cooperation)
• SAPTA ( The SAARC preferential
Trading Arrangment)
Government Influence on Trade
• Protectionism (Trade barriers)
• Tariff barriers
• Non- tariff barriers
• Exim Policy
• State Trading
• The FTDA 1972
Trade Barriers
• Teriff
– Teriff’s in international trade refers to
the duties or taxes imposed on
internationally traded goods when they
cross the international borders
Types of NTB
• Quotas
• Licensing
• VER
• Administered Protection
State Trading
• State trading means import and export
transaction of a state owned or state
controlled agency involving purchase of
goods for commercial resale
• State trading in India
• Canalisation
Exim policy
• Exim policy plays a role in directing,
regulating and promoting the foreign trade
• Mostly contains concession for exporters
focusing sharply on
1. Agricultural exports
2. SEZ
3. Infrastructural development
4. Reduction in transaction cost
The F.T.D.A. 1972
• History
• Objective
• Main Provision
– Development And Regulation
– Prohibition And Restriction
– Importer exporter code number
International Investment
• Investment is the commitment of money
or capital to purchase financial
instruments or other assets in order to gain
profitable returns in form of interest,
income, or appreciation of the value of the
instrument
Investment Theories
• Theory of capital movements
• Market imperfections Theory
• Internalisation Theory
• Appropriability theory
Types of International Investment
• Foreign Direct Investment
• FDI refers to investment in foreign country
where the investor retains control over the
investment
• Foreign Portfolio Investment
• FPI refers to investment in foreign country
where investor has only a sort of property
interest in investing the capital in buying
equities, bonds, or other securities abroad
Significance of Foreign Investment
• Helps to accelerate pace of economic
growth
• FI may help to increase countries export
and reduce import
• Direct benefit to the groups from the
analysis of Donald Macdougall
– Domestic labour
– Consumers
– Government
– External economies
Factors Affecting I.I.
• Rate of interest
• Speculation
• Profitability
• Cost of production
• Economic condition
• Government policy
• Political factor
Degrees of Dependence
Trading Partners
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Bibliography
• Websites:
• [Link]
• [Link]
• Books:
• International Business Environment by
Francis Cherunilan
• International Trade and Export Management
by Francis Cherunilan
