The term "global marketplace" refers to the international production and exchange of goods, services and money. This is an excerpt from Dr. Czinkota’s book Global Business: Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen. How do political and legal realities impact international trade, and what do businesses need to think about as they develop their global strategy? Global factors influencing business are legal, political, social, technological and economic. Some of the most important globalisation drivers are outlined below. the WTO, have reduced tariffs and various non-tariff barriers to trade, enabling more countries to exploit their comparative advantage. Certain raw materials can only be produced in certain parts of the world; many countries must trade for materials they are unable to produce themselves, and many choose to trade for goods that can be produced more efficiently elsewhere. Political factors. The costs of ocean shipping have come down, due to containerisation, bulk shipping, and other efficiencies. The gulf war after Iraq's oil exports plummeted, is due to political reasons. Related posts: Global Benefits of Trade; Pros and Cons of Foreign Direct Investments The world's political relations, the policy of a country also has a big impact to international trade. 1) Impact of Inflation: ADVERTISEMENTS: If a country’s inflation rate increases relative to the countries with which it trades, its current account will be […] Governments have long intervened in international trade through a variety of mechanisms. ADVERTISEMENTS: Most influential factors affecting Foreign Trade are as follows: Because international trade can significantly affect a country’s economy, it is important to identify and monitor the factors that influence it. The lower … International trade occurs when one country trades with another. Social factors – These factors are related to changes in social structures. Developing countries continue to drive the global recovery, but their output growth is also expected to moderate to 6.0 per cent during 2011 … Some countries have a much larger trade sector than the global average. International trade has consequently been facilitated by a set of factors linked with growing levels of economic integration, the outcome of processes such as the European Union or the North American Free Trade Agreement. Government—Business Trade Relations: The Impact of Political and Legal Factors on International Trade. As a follow up to the 2019 report by The Economist Intelligence Unit, sponsored by Basware, this new study dives into the key factors driving modern commerce, business transactions and supply chains over the next year. The role of trade for GDP thus more than doubled in that period (just like with global trade, the size of the trade sector has decreased since 2010, when it peaked at 61 percent). Businesses are affected by an external environment as much as they are affected by the competitors. A variety of factors have contributed to the process of globalisation. For global traders, digital trade enables the coordination of international production processes through global value chains. Trade between nations is an essential part of the global economy. Understanding of these factors is important while developing a business strategy. Michael R Czinkota and Ilkka A Ronkainen, Global Business: Positioning Ventures Ahead (New York: Routledge, 2011), pg.90-91. a. Positioning Ventures Ahead, co-authored by Dr. Ilkka Ronkainen trades with another and various non-tariff barriers trade! 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