International Trade Theories

Running Head: INTERNATIONAL TRADE 0
International Business
International Trade Theories
(Student Details: )
18-Feb-19

International Trade 1
Contents
International Business......................................................................................................................2
Introduction......................................................................................................................................2
Importance of International Trade Theories in Business.................................................................2
What is International Trade Theory.............................................................................................2
Mercantilism............................................................................................................................2
Absolute advantage..................................................................................................................3
Comparative advantage...........................................................................................................3
Balance of trade.......................................................................................................................3
Importance of International Trade theories for managers...........................................................4
Government’s involvement in international business and impacts on an international company
.....................................................................................................................................................5
Conclusion.......................................................................................................................................5
References........................................................................................................................................5

International Trade 2
International Business
Introduction
This report is based on the concept of international trade theory as well as its importance
for the global managers working in international business (referred as IB). In this context,
international trade theories (herein after referred as ITTs) are kind of different theories which can
explain international trade in an illustrated form (Vijayasri, 2013). As we know that trade is a
concept of trading goods and services amid two people or more than one entity. Hence, an
international trade is the concept of an exchange amid people or entities of two different nations.
In this way, this report will contain international trade theories like absolute advantage,
mercantilism, comparative advantage as well as balance of trade (Enterslice, 2017). Besides, it
will also discuss on how and why the international government gets involved in IB as well as
their impacts on an international company’s functioning (Bell, Bryman, & Harley, 2018).
Importance of International Trade Theories in Business
The importance of ITTs in IB is considerable as global trade amid different global
countries is an essential factor to raise living standards, provide employment as well as enabling
customers to leverage a broader variety of goods (Hill C. , 2008).
What is International Trade Theory
An international trade is an exchange of currency, capital, goods, as well as services
across global borders and territories. Hence, in most of the countries, trade refers to a
considerable share of gross domestic product (referred as GDP). International trading offers
consumers and global nations an opportunity to be available to novel markets as well as
products. In this way, the theories and frameworks on which our international trade is based on
are known as ITTs (Burchill, et al., 2013).
Mercantilism
This ITT is a national economic policy which is proposed to optimize the trades of any
nation. In the beginning, mercantilism was leading in rationalized parts of Europe nation since