This is a subject with one meaning but may have different names. For instance, finance departments in some institutions prefer to term it as "Finance of International Trade." This immediately triggers some questions; has International business exactly the same meaning with international trade? This question requires an understanding of trade, international trade, business, and international business before knowing what to answer. Before having an in-depth knowledge of them, you might give the right answer.
Trade s being defined as the exchange of goods and services for money or other goods." This simply tells us that handing over what you have for what you don't have is trade. It can take place in a locality or within a nation. This is why it is called internal trade. The activity of exchange of goods and services can also go beyond the national frontiers. It is this kind of exchange that is being called International Trade.
Talking of business, it precisely means an economic activity undertaken to produce both goods and/or services. The activities of business can then be splitted into technical, finance, commercial, managerial, security and accounting. The technical aspect has to do with production while accounting involves proper records keeping. On the other hand, finance is concerned with sourcing and utilization of funds.
With the above, it is clear that trade is not exactly business rather it is an integral part of business and it is then logical to say that international trade is not exactly international business. Furthermore, international business could be said to be an expansion or extension of domestic business hence, the investing company or individual must have a global Outlook and the profit seeking strategy must be impartial. It can also be seen as a conduct of a business relationship across national frontiers which is profit-oriented.
From the above, it is still clear that International business is a broader area of study than that economists traditionally refer to as the field of international trade. International trade focus is primarily on the flow of commodities among nations. However, the study of international business requires two things which includes;
An understanding of the competitive significance of the volume of production available for export and of changes in the intensity of domestic demand. Also, it requires a clear understanding of the competitive forces like inflationary trend operating in the world markets.