question_answer

What is international business? How is it different from domestic business?

Answer:

Ans.     International business refers to business which is carried on in two or more nations. It means carrying on business activities beyond national boundaries. These activities normally include the transaction of economic resources such as goods, capital, services (comprising technology, skilled labour, and transportation, etc.), and international production. It refers to that business activity that takes place beyond the geographical limits of a country. Production may either involve production of physical goods or provision of services like banking, finance, insurance, construction, trading, and so on. Thus, international business includes not only international trade of goods and services but also foreign investment, especially foreign direct investment. Differences between International Business and Domestic Business are summarised below:

Basis	International Business	Domestic Business
Nationality of buyers and Sellers	People of different nationality participate in international business.	People of one nationality participate in domestic business. Exceptions are possible.
Nationality of other stake-holders	Employees, suppliers, customers, shareholders, partners, middlemen etc. belong to different nationality in international business.	Employees, suppliers, customers, shareholders, partners, middlemen etc. belong to same nationality in domestic business. Exceptions are possible.
Political Systems	International business is subject to political system of many nations.	Domestic business is subject to political system of one country.
Risk	Degree of risk is higher m international business.	Degree of risk is lower as compared to international business.
Mobility of factors of production	Mobility of factors of production is less" across countries.	Mobility of factors of production is more within geographical boundaries of the country.
Consumer's taste and preferences	International markets are heterogeneous in terms of taste and preferences of the customer.	Domestic markets are more- homogeneous in terms of taste and preferences of the consumer.
Currency	International business involves usage of foreign currency.	Domestic business makes use of-domestic currency.
Business regulations and policy	International business is subject to rules laws, policies, and taxation system etc of multiple countries.	Domestic business is subject to rules laws, policies, and taxation system etc of single country.
Differences in bust- ness systems and practices.	Business systems and policies are hetero-geneous in two countries.	Business system and policies are more homogeneous within a country.