This module introduces the international trading environment, the forces that determine the pattern of trade (who exports what to whom?), and how firms respond to international law and institutions. This module focuses on exporting and importing as well as basic aspects of international finance.
International trade is about location advantages and the specialization in production, thus exploiting country differences in productivity, factor endowment, and production scale. We will look at international trade from the perspective of economic theory, and then proceed to the formulation of business strategy by identifying the specific opportunities and risks created by the international trading environment. Michael Porter's model of competitiveness in the international business environment provides a unifying perspective on these issues. This module also explores how location advantages may be offset by higher transaction costs or location-specific risks.
As the international trading environment is characterized by a significant degree of government involvement through trade law and trade policy, we will identify the instruments of government involvement and assess their impact on the international business.