Topics in International Business Research Paper Starter

Topics in International Business

International business comes in many forms. This paper takes an in-depth look at three such arenas: International development, trade and multinational corporations. Each of these three forms of international business, while very different in structure, play a significant role in nations' economies, business development and, just as President Wilson envisioned, the establishment and maintenance of close, peaceful relationships.

Keywords Free Trade Agreement; Multinational Corporation; International Development; USAID; World Trade Organization

International Business: Topics in International Business

Overview

Interstate commerce is by no means a new or even recently introduced concept. For thousands of years, nations have conducted trade with their immediate and regional neighbors. In the 15th century, they went much farther, as Europeans traveled across Asia and the Atlantic in search of new trade relationships. In the 20th century, President Woodrow Wilson used international business as a critical component in his vision of post-World War I peace as one of his historic 14 Points: "The removal, so far as possible, of all economic barriers and the establishment of an equality of trade conditions among all the nations consenting to the peace and associating themselves for its maintenance" (Halsall, 1997).

Wilson's "point" is one that has reverberated throughout human history. International business is a constant in an ever-changing world. It transcends the politics and sociological disparities that often separate different cultures. This fact is due to the very nature of commerce: Mutual need drives both involved parties into the relationship without consideration of those issues.

International business comes in many forms. This paper takes an in-depth look at three such arenas: International development, trade and multinational corporations. Each of these three forms of international business, while very different in structure, play a significant role in nations' economies, business development and, just as President Wilson envisioned, the establishment and maintenance of close, peaceful relationships.

International Development Aid

Among the more popular terms applied to nations in varying stages of development (one that is increasingly becoming considered outmoded and derogatory) are the monikers applied to so-called "first world," "second world" and "third world" nations. The former of these three is affixed to wealthy and fully industrialized countries, chief among them the US and the European Union. "Second world" are those countries that have emerged from poverty and have established infrastructures that can foster full industrialization, such as Mexico and the non-European Union countries of eastern Europe. "Third world" nations, as logic suggests, are those whose citizens predominantly live in poverty with very few economic or technological resources to help them move "upward" on the international ladder.

The "three worlds" concept is one that, despite its unpopularity among those in academia and government, is reflective of the discernable gulf between wealthier industrialized nations and those that have yet to experience industrialization and the prosperity that comes with it. For a variety of reasons, however, virtually all industrialized nations have in place some sort of program that provides international development aid to less-developed countries. It is to these programs (and the relationships they build) that this paper next turns attention.

Mauritania, A Case Study

In 2005, the government of Mauritania was overthrown in a bloodless coup, with a military junta put in place of what the coup's leaders called a totalitarian regime. Beyond that northwest African country's boundaries, many observers decried the move against a democratically elected government. In the streets of the capital city of Nouakchatt, however, people welcomed the move as a move toward democracy and away from international isolation. Two years later, the country held its first post-coup democratic and open elections, installing a new president, Sidi Ould Cheikh Abdellahi, as well as a new parliament.

Abdellahi's first order of business was business. Only eight months after his election, Abdellahi declared that the country was dedicated to a free, open market system and that government's role was to guarantee the safety and well-being of its people. Mauritania, he said, would be neighborly and cooperative with its neighbors. Finally, he said, the nation would be dedicated to building its economic resources so that it could become part of the international business world. His comments, which appeared in a November 2007 edition of Foreign Affairs, were in effect an advertisement, inviting countries to join Abdellahi and the new government in rebuilding the new Mauritania. "Mauritania's uniquely strategic position on the northwest African coast and blend of Arab and African culture," he wrote, "sets the stage for mutually beneficial relationships with surrounding nations and particularly European, American, and Asian partners" (Foreign Affairs, 2007).

The efforts of Mauritania to attract international development funds and other forms of aid are not unique. Countless developing nations on nearly every continent recognize two important facts about their status: First, they desire to attract potential business, political and security partners from a membership in the international community; and second, they lack the infrastructure and/or the economic, social and political stability necessary to drawing investment.

The Attract

A central theme consistently arises in the discussion of international development aid, one that has been manifest in this author's use of the terms "attract" and "draw." International development, after all, is not a philanthropy. No national government would invest state funds in contributing development aid to a nation that will not use the monies in such a way that there is no sign of improvement, nor a return on that investment.

An examination of the history of the primary source of American international development, the United States Agency for International Development (USAID), presents an illustration of this point. After World War II, efforts to reconstruct a devastated European theater proved successful, lasting until 1951. From that point onward, however, the US international aid system became confused and schizophrenic, with countless Congressionally-implemented subparts instilled in the place of European reconstruction aid systems. President Eisenhower and his successor, President Kennedy, saw the machinations of that system becoming bogged down in oft-contradictory bureaucracy. They also took notice of the lack of criteria used to determine the recipients of that aid. In 1960, the public's taste for helping war-torn, impoverished and unstable governments had soured significantly.

In 1961, however, Kennedy gave new life to the policy of international development. Dismantling the multifarious aid agencies and organizations, he crafted together USAID under his "Foreign Assistance Act." The focus of development programs, he said, would be on developing countries whose stabilization and growth would almost certainly ensure security (particularly at the height of the Cold War) and even trade relationships. A major point he delivered in his proposal was that the economic collapse of developing countries "would be disastrous to our national security, harmful to our comparative prosperity, and offensive to our conscience" (USAID, 2005).

The United States is not alone in its "no free riders" position with regard to international aid. Like the US, the European Union (EU), which has been the predominant figure in the redevelopment of the former Soviet Union countries, has long worked to provide aid to those nations that are rebuilding from decades of external control. However, in determining the amount of funds to distribute among developing nations, the EU also seeks some sort of intrastate benefit from such relationships. While the European nations do not expect an immediate economic return, its international development funds tend to flow more freely when they are delivered to countries that are strategically and potentially important economic partners (Kostadinova, 2004).

International Development Planning vs. Philanthropic Relief

An important distinction to be made here between international development funding and disaster or philanthropic relief. The former, to which the above text refers, is a long-term investment designed to build infrastructures, systems and programs that developing nations can use to restart...

(The entire section is 3842 words.)