4.1.2 international trade + business growth

• imports explained

  imports are goods and services bought by people and businesses in one country from another country
• exports explained

  exports are goods and services sold by domestic businesses to people or businesses in other countries
• calculating exchanges rates

  to convert to £, divide by exchange rate

  to convert from £, multiply by exchange rate
• foreign direct investment (FDI)

  is when a foreign business invests in another country by setting up operations or buying assets in domestic businesses

  • greenfield facilities: setting up stores/manufacturing facilities in a new location
  • joint venture: when two business share ownership and control in one specific region
  • strategic alliance: companies come together to share a particular resource
  • merger/acquisitions: permanently joining with or taking over another company to expand overseas
• what is better - FDI or imports/exports?

  imports/exports:

  • no investment required so no risk = good way to test the waters

  FDI:

  • means business is closer to customers so can understand them more = meet their needs
  • more control
  • less logistics
  • overcomes trade barriers