2. CHAPTER OBJECTIVES © SOUTH-WESTERN EDUCATIONAL PUBLISHING INTERNATIONAL ENVIRONMENT OF BUSINESS nDescribe the nature, growth, and importance of international trade and investment. nDistinguish between the different forms through which international business is conducted. nIdentify common barriers to international business and reasons for growth. nExplain two theories of international trade. nDiscuss the concepts of balance of trade and balance of payments. nConsider career opportunities in international business and understand the factors related to being sent abroad on assignment. 44

3. © SOUTH-WESTERN EDUCATIONAL PUBLISHING Canada Mexico Japan China Germany United Kingdom Taiwan South Korea France Singapore IMPORTANCE OF INTERNATIONAL BUSINESS nExtent of international trade nTrade, investment, and the economy nTop 10 countries with which U.S. trades

4. © SOUTH-WESTERN EDUCATIONAL PUBLISHING FORMS OF INTERNATIONAL BUSINESS nExporting nImporting nInternational licensing nJoint venture nWholly-owned subsidiary nStrategic alliance

5. © SOUTH-WESTERN EDUCATIONAL PUBLISHING MULTINATIONAL FIRMS nHome country nHost country nParent firm nSubsidiaries

6. © SOUTH-WESTERN EDUCATIONAL PUBLISHING INTERNATIONAL TRADE CHALLENGES nGovernment policies nDumping nQuota nNon-tariff barriers nEmbargo nSanctions nCurrency values nCultural differences nLow-context culture nHigh-context culture

7. © SOUTH-WESTERN EDUCATIONAL PUBLISHING REASONS FOR GROWTH IN INTERNATIONAL BUSINESS nWorld Trade Organization (WTO) nTrading bloc nEuropean Union (EU) nNorth American Free Trade Agreement (NAFTA) nInternational Monetary Fund (IMF) nWorld Bank

8. © SOUTH-WESTERN EDUCATIONAL PUBLISHING THEORIES OF INTERNATIONAL TRADE AND INVESTMENTS nComparative advantage theory nProduct life cycle theory

9. © SOUTH-WESTERN EDUCATIONAL PUBLISHING BALANCE OF TRADE nBalance of payments nCurrent account nCapital account

10. © SOUTH-WESTERN EDUCATIONAL PUBLISHING CAREER OPPORTUNITIES IN INTERNATIONAL BUSINESS nExporting and importing nTeaching and translating nAdministering trade laws nManaging foreign offices and operations nBanking and insurance nInternational trade organizations nGovernment agencies

11. © SOUTH-WESTERN EDUCATIONAL PUBLISHING EMPLOYMENT OF INTERNATIONAL MANAGERS nAdaptability nCitizenship nCulture shock