Trends In International Business

A number of major political and economic upheavals occurred in the 1990s. These events have driven many new trends in international business. Some of these events and trends include:

Liberalization of markets

Deregulation of industries

Changes in Eastern Europe since the fall of the Berlin Wall

Financial crisis in Mexico (1994) and Southeast Asia (1997)

Identify and explain the importance of three major finance trends in international business since the 1990s. You may use the list above or you may consider other trends in international business.

Why are these trends important for the global economy?

How do they affect multinational corporations? How do they affect you as a consumer?

Based on your textbook reading and Internet research, answer these questions in a short essay, 3–4 paragraphs in length, and post the essay in the Discussion Area. Cite your sources, as appropriate. Comment on at least two other essays. In your response to other student essays, consider the following:

Do you agree or disagree with the author of the essay? Why?

How do your views differ with those of the author of the essay?

Did you learn something new from this essay?

Financial trends all over the world affect not only direct competitors, but also affect the entire global market. Deregulation of industries has an interesting affect with trade by listing shares across borders. The reputation the Euro has gained, and may continue to gain, is globally eventful and could change the way foreign exchange rates are quoted. Trade liberation is continuing to open the world market, even to countries that had protectionists economy policies, this is in turn increasing the international trade and benefiting the countries involved. Lastly, the global crisis of 2007-2008 affected the financial market emphatically and resulted in many major financial deficiencies and shrank international trade rapidly.

One example of deregulation of industries have used technological advancements to introduce foreign companies into local Stock exchange. For instance, companies from China, Japan, Germany, etc. are directly in the New York Stock Exchange as well as U.S companies being in foreign Stock Exchanges. This, in my eyes, is a huge advancement for the global financial standpoint. More companies selling stocks equals more currency flow throughout the world. This trend is fairly new, however I believe it will continue to be a strong factor in global finances. Deregulation of industries also includes “currency futures and options, multicurrency bonds, international mutual funds, country funds, exchange-traded funds (ETFs)” (Eun, C., Resnick, B., 2014).

Another noted and important trend is the Euro and how large of a used currency it has become. 17 countries with 300 million Europeans use this single currency, it is even possible that it will expand to “new members of the EU, including the Czech Republic, Hungary, and Poland” (Eun, C., Resnick, B., 2014). With the gain of those EU members, the Euro will be a larger transaction domain than the US dollar. Because the Euro is so commonly used it affects the global financial trend by “rivaling the U.S. dollar for dominance in international trade and finance” (Eun, C., Resnick, B., 2014). A change in the dominant currency of global finances would greatly affect how currencies are exchanged at what rate.

Third on the important major finance trends is Trade liberation. Starting with the theory of competitive advantage, where if one country is better at producing limes they will specialize in limes as another country who is better at producing apples will specialize in apples. It is important to mention that liberalization is not a zero-sum game, it is implicated to enhance all the worlds citizens. To keep members of trade n order and fair, barriers are agreed upon and followed with constant monitoring and negotiating. As trade grew, a higher power had to be initiated to control the laws and regulations, this new organization is called the WTO or world trade organization. These acts in the liberalization stage have evolved and changed as the international trade grew larger. It shows us that there will always be room for growth and improvement in relations to trade and finances.

References

Eun, C., Resnick, B. (02/2014). International Financial Management, 7th Edition. [Argosy University]. Retrieved from https://digitalbookshelf.argosy.edu/#/books/1259348458/