Chapter 5 – Understanding International Business
THE RISE OF INTERNATIONAL BUSINESS
-Total volume of world trade today is $8 trillion each year.
-Globalization is the integration of market globally.
-Imports are products that are made or grown abroad and sold in Canada
-Exports are products made or grown in Canada that are sold abroad.
The Contemporary Global Economy
-In past many nations followed strict policies to protect domestic business, today more
and more countries are aggressively encouraging international trade.
-Governments and businesses have simply become more aware of the benefits of
globalization to their countries and shareholders.
The Major World Marketplaces
-The contemporary world economy revolves around three major marketplaces: North
America, Europe, and Asia-Pacific. They are home to most of the world’s largest
economies, biggest multinational corporation, most influential financial markets, and
-The World Bank uses per capita income, the average income per person, as a measure
to divide countries into one of four groups:
oHigh-income countries are those with per capita income greater than US$10,065.
oUpper-middle-income countries are those with per capita income between
US$3255 and US$10,065.
oLowe middle-income countries are those with per capita income between
US$825 and US$3255.
oLow-income countries are those with annual per-capita income of less than
US$825. Due to low literacy rates, weak infrastructures, unstable governments,
and related problems, there countries are less attractive to international
-The US dominates the North American business region.
-The second largest marketplace and enjoys the most stable economy in the world.
-The US and Canada are each other’s largest trading partner.
- Mexico has also become a major manufacturing centre, especially along the southern
-Western Europe, dominated by Germany, the UK, France, and Italy, has long been a
mature but fragmented marketplace.
-Ecommerce and technology have become increasingly important in Europe.
-Asia-Pacific consists of Japan, China, Thailand, Malaysia, Singapore, Indonesia, South
Korea, Taiwan, the Philippines, Australia, and New Zealand.