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Difference between International Trade and International Business

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International Trade and International Business are generally used synonymously, but they are not the same. The former involves the exchange of goods between different countries of the world; however, the latter involves business activities that take place beyond the geographical boundaries of a nation.

Difference between International Trade and International Business

What is International Trade?

The exchange of goods between different countries of the world is known as International Trade. International trade, comprising exports and imports of goods is an important component of international business. 

What is International Business?

Those business activities that take place beyond the geographical boundaries of a nation are called International Business. It involves movement of goods, services, capital, technology, intellectual property, like patents, trademarks, copyrights, etc. Foreign currencies are used in international businesses. Such types of businesses require heavy documentation and are subject to many formalities. It also involves a high degree of risk but helps a business to earn foreign exchange, utilise resources efficiently, and improve growth prospects and employment potentials. 

Difference between International Trade and International Business

Basis

International Trade

International Business

Meaning The exchange of goods between different countries of the world is known as International Trade. Those business activities that take place beyond the geographical boundaries of a nation, but also include movement of capital, personnel, technology and intellectual property, are called International Business. 
Goods and Services It includes only movements of goods. International business includes goods and services such as international travel and tourism, transportation, communication, banking, warehousing, distribution and advertising.
Currency used International Currency is used in case of International Trade. International Currency of more than one country is used. 
Scope International trade has a narrower scope. International business is broader than international trade and includes international trade.
 
Effect on Foreign Reserve It has a direct impact on the foreign reserves of a country. It also has a direct impact on the foreign reserves of a country.
Risk It involves comparatively less degree of risk.  It involves a high degree of risk.

Last Updated : 20 Jul, 2023
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