Significance of International Business

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The significant of international Business in the 21st century

According to Peng and meyer International Business refers to businesses (firm’s ) that engages in international cross-border economic activities and or the action of doing business abroad.Companies decide to go global and enter international market for various reasons e.g. Multinational enterprises, (MNE),this are firms that engages in foreign direct investments and operates in multiple countries. Some reasons why Firms choose do business internationally is to diversify the market and customer base, access cheaper labour, affordable resources, e.g raw materials, increasing sales/profits. International business can also be affected by certain factors such as inflation, impact on national income, government policies, subsidies for exporters, impact on exchange rates , technologies, and even restrictions on imports.
IMPORTANCE OF MULTINATIONAL ENTERPRISES (MNE’s) 1. Mmultinational enterprises are important source of foreign direct investment (FDI). Besides, it is through multinational enterprises that modern high technology is transferred to the developing countries. In addition to this basic issue, a big firm may decide to set up and operate business units in other countries to benefit from advantages of location and low labour costs, for example, it has been found that giant American and European firms set up production units to explore and refine oil in Middle East Countries because oil is found there. Similarly, to take advantages of lower labour costs, and not strict environmental standards. 2. A MNE investing in an area may result in a significant injection into the local economy. This may provide jobs directly or through the growth of local ancillary businesses such as banks and insurance. It might initiate a multiplier process generating more income as newly employed workers spend…...

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