Comparative Examination Between S. africa and India Research Paper

Comparative Analysis Among South Africa and India

Term: Abdulrahman Saad Al Romaihi

Course: INTB20121 International Business Environment

Teacher: Mumin Abubakre

Date: 28\1\2013

Introduction

Foreign business is a term produced from international transact and accustomed to describe all forms of organization transactions that take place among two or more countries. Either these types of business deals can be private based, semi-government based or perhaps government structured. International transact involves the establishment of production services by manufacturers in foreign countries (Buckley, 2005). In addition, it incorporates all small businesses that importance or export very small volumes to only a single country and big global companies with strategic complicite and bundled operations all over the world.

International business has knowledgeable growth from early 20th century and this has been credited by the liberalization of both investment and trade in the international marketplace. Trade liberalization came about as a result of introduction of the General Agreement on Tariffs, Trade (GATT), and Globe Trade Firm (WTO). Advanced technology has allowed the transfer involving electronically to make transport and communication efficient hence playing a big part in the liberalization of international business (Daniels & Radebaugh, 1997) South Africa is one of the countries in the world that provides the best environment for international business. This is certainly attributed by country's very good infrastructure, good health care providers, advanced technology and also other factors that attract overseas investors. The has entered into trade negotiating with the U. S, Eu and other countries all over the world to ensure that the products going into the country are duty totally free or are recharged lower costs (Kauser & Shaw 2004).

Various Theories of Foreign Business

Numerous theories had been formulated to describe various concerns concerning foreign business. The theories further compare the international business environment in India and South Africa. The advantage theory

Adam Smith formulated the idea back in 1776. Smith acquired the view that each country posseses an absolute edge over another regarding the production of particular goods and services. This really is attributed to the truth that a few countries have advantage of competent labor, cheap labor, agricultural land as well as the availability of inexpensive raw materials. Such countries will be therefore capable of producing some particular products at a cheaper price. For example , South Africa finds absolute advantage in the extraction and exportation of platinum, precious metal diamonds and other minerals abroad because of the accessibility to raw materials and cheap and skilled labor. On the other hand, India does not have the absolute benefit of these particular products because the nation lacks the raw materials to generate them (Punnett & Ricks, 1997). Smith also experienced the view which a nation like South Africa which includes the absolute edge produces even more products than other countries while using the same assets. The theorist argues that quotas and tariffs should not be a burden to intercontinental business however the market forces should specify trade. In respect to Smith, for control business to hit your objectives a land should concentrate on the production of goods and providers it has absolute advantage in. South Africa is usually an example of this form of niche because it dominant in the exportation of nutrients and imports consumable goods that can price the country lots of money if manufactured locally (Punnett & Ricks, 1997). On the other hand, India which includes an absolute benefits in the exportation of elementary petroleum aims to foreign trade its agricultural products like fish, plums and charcoal. By exporting consumable items, the people in India business lead a low standard of living as compared to S. africa. Adam Smith's view is usually that the wealth of a rustic is determined by people's...

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