Issues involved in International Business and Finance

24/08/2020 1 By indiafreenotes

International business finance is the art of managing money on a global scale. Students interested in this field study various areas of finance, such as investments and corporate finance. Before you continue your study of international markets and global financial institutions, you must understand the fundamentals of domestic operations.

As an expert in international business finance, you may pursue a career with a multinational corporation, financial institution or consulting firm. Your level of education and experience will be key to obtaining a position, as international jobs are usually reserved for candidates with strong foreign language skills and knowledge of a specialized area of finance. For example, you may work as a financial officer, helping organizations grow through mergers, contracts and expansions in the most cost-effective way possible. As a financial analyst, you’ll guide businesses and individuals through investment decisions by studying financial statements and the global economy.

  1. Different Trade Patterns

International business has to deal with the business patterns among the various countries of the world.

It has to take into account these business policies of various countries which govern their imports and exports. These policies and practices impose certain constraints and restrictions on international business.

  1. Regulatory Measures

Every country wants to export its surplus natural resources, agricultural produce and manufactured goods to the extent, it can and import only these goods and products which are not produced or manufactured within the country. For this purpose regulatory measures like tariff barriers (custom duties) non-tariff barriers, quota restrictions, foreign exchange restrictions, technological and administrative regulations, consulter for­malities, state trading and preferential arrangements, trade agreements and joint commis­sions etc. Come in the way of free trade and unfettered flow of foreign business.

  1. Lop Sided Development of Developing Countries:

Developed counters are equipped with sophisticated, technologies capable of transforming raw materials into finished goods on a large scale. While developing countries on the other-hand lack technological knowledge and latest equipment. It leads to the lop sided development in the international business.

  1. Economic Unions

There is an increasing tendency among nations to form small groups of Economic Unions which help them to negotiate terms for the business with other countries.

  1. National Policy of Development

The country desirous of achieving self-sufficiency, follows a strategy of importing capital goods equipped with latest and sophisticated technology and restricting imports of less important consumer goods with a view to lowering down its import bill.

  1. Procedural Difficulties

Different countries have evolved different procedures, practices and documents in order to regulate the export trade. Some of these such as foreign exchange control regulations and others have been formulated after keeping in view the national objectives and have posed certain procedural problems to exporters and importers.

  1. Other Problems

Apart from the problems written above there are many other internal difficulties which restrict our export business and consequently affect the foreign exchange earnings.

They are:

(i) Business and industry have not recognised the importance of international business,

(ii) Inflation, high prices and black marketing are starting us in the face. If the situation persists it may put our price level beyond the means of our customers abroad, no matter how badly they need our export,

(iii) Our internal economy is being managed very badly in recent years. If it continues we cannot supply our own essential need. What to say about supply to other nations,

(iv) Poor business ethics is also responsible for our international business.