International Business Environment and Trade: An Essay

This essay delves into the intricate relationship between the global business environment and international trade. It begins by exploring the multifaceted factors of the global economy, including political stability, economic indicators, social dynamics, technological advancements, environmental considerations, and legal frameworks, and how these elements directly influence the growth and development of international trade. The essay then examines the global business environment and its significant influence on the expansion of international businesses, emphasizing the role of globalization as a key driver. It further analyzes various drivers of globalization, such as technological advancements and political reforms, while also addressing barriers like ethical concerns and non-tariff obstacles. The discussion extends to the evolving patterns of the world economy and their impact on international trade, including the rise of trading interventions and shifts in manufacturing and export shares among different countries. The essay concludes by summarizing the transformative effects of globalization on international businesses and highlighting the critical importance of understanding the interplay of diverse global factors for the success of international trade and business operations.

ESSAY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact of factors of global economy on international trade.......................................................3
Influence of global business environment on growth of international businesses......................5
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The global business environment is basically the blend of various factors which operates
on the global level and hence impacts the operations of organizations. Globalization on the other
hand is the process through which large number of organizations interact with each other across
the borders and hence trade. The major purpose of this report is to study the impact of global
business environment on the international trade and business.
This report gives a brief about impact of factors of global economy on international trade
and influence of global business environment on growth of international businesses.
MAIN BODY
Impact of factors of global economy on international trade
Business environment is basically the mixture of all the internal as well as external
factors like employees, needs ad expectations of the customers, clients etc which directly or
indirect impacts the operations of business. In view of this, global business environment is
predominately the environment within various sovereign countries along with the factors which
are exogenous to home environment of organization and thus influences decisions making. Since
the emergence of globalization, the global economy has taken a drastic turn and has transformed
the large number of organization (Meyer and Peng, 2016). Globalization is basically the process
through which products as well as services are traded across the international borders and thus
interaction between people occur from different nation. There are various factors which has
affected the global economy and these factors have a direct impact on growth of the international
trade.
Political factors
The various political factors like tax rate, country stability, government stability etc
affects the growth of Internationale trade in both positive and negative way. The relation
between the trading nations are of utmost importance for the development of the international
trade (Hamilton and Webster, 2018). For example- the politically stable country or nation having
few policies which restricts international trade will eventually expand its trade rapidly. On the
other hand, when the nation is politically unstable then this results to the violence and thus this
causes a great barrier to the growth and development of international trade.

Economic factors
Economic factors mainly encompasses exchange rate, employment ratio, interest rates etc
which impacts the growth as well a development of international trade. The exchange rate tend to
fluctuate on the basis of demand for the specific currency. When these currencies fluctuate in
term,s of the price then it becomes easier as well as cheaper for the businesses to purchase goods
and products in the one country and then sell them into another one. Thus, this has a positive
impact on the international trade and thus helps in their growth (Strange and Zucchella, 2017).
Social factors
The attitude, lifestyle, cultures, age of the people also affects the growth of the
international trade and forms the major factor which is affecting the global economy. When the
people in a country remain conscious of their personality and hence lead a great lifestyle due to
high income, education then it becomes easier for the businesses to trade their products in that at
high prices. Whereas on the other hand, nations in which culture as well as values are given
prime important and people are highly conscious of their culture then it sometimes becomes
difficult for businesses to trade their products (Cuervo-Cazurra, 2016).
Technological factors
Technological factors forms the core factor of global economy and thus this impacts the
International businesses to great extent. The various technologies mainly facilitates the advanced
communication between nations. Thus, this impact the international trade to a high extent. The
nation which integrates technology in each of its aspect then this allows the International
businesses to easily trade their goods and services. On the other hand, nations in which
technological advancements have not developed and are developing at the slow pace then the
international businesses finds it difficult to communicate with nations and thus their trading is
highly hindered (HOTEL, 2016).
Environmental factors
Various environmental factors like environmental policies, weather, climatic conditions
etc poses a high impact on the growth as well as development of international businesses. The
nations where environmental policies are strictly followed tend to pose a great tax on the
products as well as services which can harms the environment thus due to this high tax, the
international businesses incurs a high amount of cost and thus this impacts the overall operations.
Besides this, the growing awareness of people for environment and their demand for

environment friendly products have accelerated the growth of international businesses and thus
have increased the trade between nations (Kolk, 201).
Legal factors
The legal factors such as patents, copyrights, government policies etc is major factor in
global economy which somewhere affects international trade. The nations where the legal
policies as well as laws continuously changes then every-time remaining aware of these laws
sometimes becomes difficult for the international organizations and this overall affects their trade
and operations. This poses a great barrier for the international trade. While, when the relation
between the nations are good then this affects the international trade in positive way. The
positive legislatures enables the organizations to trade freely (Cano-Kollmann and et.al.,2016).
Influence of global business environment on growth of international businesses
The global business environment encompasses various factors which eventually affects
global economy like Socio-cultural factors, political, economic, legal factors etc and thus this
global business environment consisting of these factors greatly influences the development of
international business. It has been analyzed by the researchers that global business environment
contributes around 85.4% towards developing the international business and supports more than
7545 billion industries and organization which trades internationally across the world. The global
business environment is mainly reflected by the globalization and hence the drivers as well as
barriers of the globalization eventually affects the development of the international business.
There are range of drivers of the globalization which influences the development of international
trade (Cantwell, 2017).
Technological drivers
This is one of the most important driver which eventually has led to the growth of
international trade. Since the inception of globalization,it has become easier for the international
business to trade freely. For example- the containerization is one of the major driver of
globalization through the international organizations are able to communicate with other nations
and trade their products (Buckley, 2017).
Political drivers
The liberalized rule of trading as well as deregulated markets have given a boost to the
global business environment by lowering tariffs as well as allowing the foreign direct

investments. This has ultimately led to the growth of international businesses by enabling
international organizations to trade at less cost.
Besides the drivers of the globalization which has impacted the growth of international
business in positive way, its various barriers has somehow hindered their operations.
Ethical barriers
This is one of the most important barrier to globalization which has somehow impacted
the international businesses. The rise of the globalization has eventually raised importance of the
international trade along with political and social effects. But this has also hindered some of the
ethical practices which was mainly established for facilitating mutual cooperation between the
governments (Meyer and Peng, 2016). This has somehow prevented international businesses to
trade freely.
Nontariff barrier
This is the another barrier to globalization which has affected the operations of
international business and have impacted to great extent. The Nontariff barrier are generally the
trade barriers which restricts the import as well as export of services and goods across
boundaries. This barrier is one of the major challenge in globalization due to which most of the
countries have now controlled the amount of trade which they conduct together with different
countries. This has eventually limit the trading of international businesses (Hamilton and
Webster, 2018).
Changing pattern of world economy & international trade
The changing pattern of world economy has somehow affected the growth of the
international businesses and hence has transformed the entire world. The changing pattern
mainly relates to the way as well as pattern of doing the international business by organizations.
There has been the emergence of major changes within global economy from part few years. The
most important change has been the advent of trading interventions as well as controls which
however has allowed the business to trade freely but simultaneously has erected the barriers for
trading with non-members which are not included in the trading blocs (Strange and Zucchella,
2017).
Besides this, the trade in many countries for example in UK has relatively fallen down in
terms of commercial as well as financial services which has somehow changed the pattern of
international trade. A large number of advanced economies generally have faced

deindustrialization along with little national input which is being generated through
manufacturing sectors. Various industrialized countries such has US, China have eventually
raised their share of the manufacturing export and have also increased the share of the world
trade. For example- in the year 206, US mainly captured around 25% of the global trade within
hi-tech goods while on the other hand China only had 3%. In the year 2017, the share of US
declined to around 15% and on the other hand, share of china subsequently increased to nearly
15%. Thus, with the changing global economy, the pattern of the international trade has also
changed (Cuervo-Cazurra, 2016).
CONCLUSION
It has been summarized that globalization has transformed the world to ab great extent
and thus have revolutionized the world. The major effects which this globalization has posed is
on the international businesses. There are various factors which affects the global economy and
these factors directly impacts the growth of the international trade. The numerous factors like
political, legal, economical etc influences the international businesses to great extent. Besides
this, the changing world economy has eventually affected the development as well as growth of
the international businesses.

REFERENCES
Books & Journals
Buckley, P., 2017. International business. Routledge.
Cano-Kollmann, M and et.al.,2016. Knowledge connectivity: An agenda for innovation research
in international business.
Cantwell, J., 2017. Innovation and international business. Industry and Innovation.24(1). pp.41-
60.
Cuervo-Cazurra, A., 2016. Corruption in international business. Journal of World
Business.51(1). pp.35-49.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
HOTEL, R.B., 2016. International Business English.
Kolk, A., 2016. The social responsibility of international business: From ethics and the
environment to CSR and sustainable development. Journal of World Business.51(1).
pp.23-34.
Meyer, K. and Peng, M.W., 2016. International business. Cengage Learning.
Strange, R. and Zucchella, A., 2017. Industry 4.0, global value chains and international business.
Multinational Business Review.