Q.Differentiate between international trade and international business.

International trade is only the export and import of goods and services between countries. International business is a much broader term that includes trade PLUS foreign investment and the production and marketing of goods and services in foreign countries, along with movements of capital, personnel, technology and intellectual property.

The common confusion

Many people treat "international trade" and "international business" as the same thing. They are not. International trade is only one part of international business, which is a much broader term.

International trade

• Means the export and import of goods and services between countries.
• Historically this — especially trade in goods — was the most important part of doing business abroad.
• It is about goods and services physically or commercially crossing national frontiers through buying and selling.

International business

• Means all business activities that take place across national frontiers.
• It includes not just the movement of goods and services, but also the movement of capital, personnel (people), technology and intellectual property such as patents, trademarks, know-how and copyrights.
• Beyond trade, its scope has widened to cover two big developments: increased foreign investment and overseas production of goods and services — firms investing in and producing inside foreign countries to get closer to foreign customers and serve them at lower cost.

The relationship, in one line

International business is made up of both the trade AND the production of goods and services across frontiers. So trade is a subset; business is the whole.

Basis-by-basis contrast

• Meaning — Trade: export/import of goods and services. Business: trade + production + investment abroad.
• Scope — Trade: narrow (only buying and selling). Business: wide (also overseas manufacturing, licensing/franchising, joint ventures, wholly owned subsidiaries).
• What moves — Trade: mainly goods and services. Business: goods, services, capital, people, technology and intellectual property.