Factors affecting the growth of international business

Though international business has experienced tremendous growth in the recent times, there are still some factors that affect its growth. Such factors are: i. Political stability: Different countries vary on the way they handle and deal with issues related to international business. Some countries encourage foreign businessmen and companies to invest in their land by reducing investment taxes and offering them a favorable and level playground while others impose tough conditions.
Therefore when an individual or company is considering investing on a given country, political stability should be an issue of great concern. A country that is politically unstable is prone to making quick decisions that can negatively impact on the fate of international businessmen and investors (Dunning, 1999:481). For example, a country can decide overnight to change its policies towards engaging itself in international business.
Political instability has also been the cause of civil wars in most countries resulting to serious economic catastrophes. ii. Foreign currency: Transacting in foreign currency has also been a major issue affecting the growth of international business. Foreign currency usually fluctuates in value posing a serious danger to foreign companies as well as the businessmen. These parties could lose an enormous amount of money especially if the foreign currency loses value before they can exchange the currency to the desired one.

Another case that involves currency is that some countries do not usually have the cash necessary to purchase a particular product. The only means of carrying out transactions with such countries will only be involving in exchange of goods for other goods or counter trading. Such kind of trade used to exist in pre-historic times and it was majorly known as barter trading. An example of counter trading involves a foreign company exchanging cars for steel with a certain country. The company then uses the steel to manufacture other new cars.
iii. Self sufficiency: Another issue that has been affecting the growth of international business is self sufficiency. Self-sufficiency is a situation in which a given country does not want to involve in international business with other nations. Such countries prefer taking this route mainly due to their strong political and cultural beliefs. An example of this is the former Soviet Union. The Soviet Union imposed policies and restrictions that prevented practicing whatever kind of trade with other nations apart from their allies.
The major reason why the Soviet Union avoided involving themselves with international business was due to the fact that they wanted to carry out their leadership without being influenced by other external forces. iv. International Trade Policies: Another important factor influencing the growth of international business is taxes. Most countries impose excise tax on imported goods and commodities. Excise tax is imposed on imported products due to various reasons. For example, a country could impose a revenue tax on a particular product.
This kind of tax is majorly used by such country to generate its own revenues to be used in other forms of development. Revenue tax is usually set at a lower cost and does not have much impact on international business. But there arise a situation whereby, the domestic companies compete for a local market with foreign companies. This usually prompts the government of the affected nation to impose protective tax on the imported goods (Kline, 2005:7). This is normally done in order to make imported goods more expensive than the domestic ones thus protecting the domestic companies.

myhomeworkgeeks (28431)
New York University

Click Here to Hire an Expert

Hire Verified Expert

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
The price is based on these factors:
Academic level
Number of pages
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more
Have a homework question? Get help from verified tutors now!
error: Content is protected !!

Are You Looking For Assignment Help? We Can Certainly Assist You