Define International Business with its Benefits

International Business: International business refers to business activities that take place across national frontiers. Though many people use the terms international business and international trade synonymously, the former is a much broader term. International business involves not only trade in goods and services, but also other operations such as production and marketing of goods and services in foreign countries.

Reasons: The primary reason for international business is that nations cannot efficiently produce all that they require. Due to differences in resource endowments and labor productivity, countries find it much more advantageous to produce goods and services in which they have cost advantage and trade the surplus in such goods and services with other nations in exchange of goods and services which others can produce more efficiently.