1. INTRODUCTION
What is International Business?
 Business dictionary.com defines international business as “the
exchange of goods and services among individuals and businesses
in multiple countries.”.
 While wikipaedia’s definition goes thus: “International Business
comprises all commercial transactions (private and governmental,
sales, investments, logistics, and transportation) that take place
between two or more regions, countries and nations beyond their
political boundaries.” en.wikipedia.org.“
 International business deals primarily with business activities
that crosses national boundaries whether they be movement of
goods, services, capital or personnel, transfer of technology or even
the supervision of employees” Jakada (2014)

2. A brief history of International
Business?
 The barter of goods or services among different peoples has been in
existence for ages and it could also be said to be an age-old practice,
probably as old as human history. International business began with
the advent of the modern nation-state close to the European middle
ages; political thinkers and philosophers began to explore how nations
functions and conducted businesses between each other, it then
became a topic of their enquiry.
 One of the earliest attempts to describe the function of international
business within that highly nationalistic body of thought became
known as mercantilism. Britannica.com said “International business
has a rich history starting with barter system being replaced by
Mercantilism in the 16th and 17th Centuries. The 18th Century saw the
shift towards liberalism

3. A brief history of International
Business?
 The first important factor is the continuous decline in
transportation costs—the natural barriers to trade—
throughout the century. The second factor is the
change in trade-related policies: those that affected
regional trade and those that affected trade at the
global level.” Dan Ben-David (1999)

4. Literature Review
 Majority of the literature studied in the course of
producing this paper agree that no nation is an island
and as such cross-border trade exists amongst almost
all countries in the world.
 The World Bank on its website said “Countries that
have efficient customs, good transport networks and
fewer document requirements— making compliance
with export and import procedures faster and
cheaper—are more competitive globally

5. Literature Review (contd)
 Environmental restrictions in countries such as
Australia, Canada, and the United States have opened
the way for China to become the world’s leading
producer and exporter of rare earth metals.
 From the foregoing, it becomes imperative that
nations have to develop checks to ensure that its
sovereignty, its economy, its local businesses and its
interests are duly protected while these MNCs are
doing business within their shores.

6. CONTROLS IN INTERNATIONAL BUSINESS
 “Despite valid arguments made by supporters of trade controls, most
experts believe that such restrictions as tariffs and quotas—as well as
practices that don’t promote level playing fields, such as subsidies and
dumping—are detrimental to the world economy. Without
impediments to trade, countries can compete freely. Each nation can
focus on what it does best and bring its goods to a fair and open world
market. When this happens, the world will prosper. Or so the
argument goes. International trade hasn’t achieved global prosperity,
but it’s certainly heading in the direction of unrestricted markets.”
Karen Collins (2014)
 Multinational Companies ("MNCs") have become very large and very
powerful. Some, for example, are worth more than the entire GDP of
many countries. So MNCs can have an enormous effect, for good or for
evil, on the countries they do business in, especially if those countries
are small and or poor.
 Government engage in regulation in order to support state and public
interests” (Bauchet 2003) and “to promote a public good and redress
public ‘bad’, in other words positive and negative externalities” (Spar
2001).

7.  The figure below gives a broad description of the link
between the controls put in place by home country and
the host country.

8. CONTROL IN TRANSFER OF
GOODS
CONTROL IN TRANSFER OF
MONEY
CONTROL IN TRANSFER OF
FOREX
CONTROL IN TRANSFER OF
FOREIGN EXCHANGE
CONTROL IN TRANSFER OF
CAPITAL
HOME COUNTRY
MAIN OFFICE
DECISION CENTER
COMPANY POLICY STATEMENT
STRATEGIC DECISIONS
EXPANSION DECISIONS
BRANCH OFFICE
INVESTMENTS
SUBSIDIARIES
PORTFOLIO INVESTMENT
HOST COUNTRY
FRANCHISES
CONTROLS
CONTROL IN TRANSFER OF
PERSONS
CONTROL IN TRANSFER OF
TECHNOLOGY & RIGHTS

9.  Technology transfer, thus, has become an important part
of international business transactions. Indeed, Technology
Transfer and International Business suggest that
international business in this era is about technology
transfer.
 The phrase "technology transfer" itself was coined by
economists who, in seeking ways to bridge the gap in levels
of development between the developed and under-
developed countries, prescribed the acquisition by the host
country of technology developed in the home country.
Nevertheless, the term "technology transfer" has now come
to embrace far more than that.

10.  Multinational firms generally engage in technology
transfer through licensing arrangements with non-
affiliated firms or through foreign direct investment with
affiliated firms. These are sometimes referred to as external
and internal technology transfer, respectively.
Multinationals generally prefer internal technology
transfer.
 Government policy plays a large role in technology transfer.
The advanced capitalist countries typically have policies
that restrict the outflow of certain technologies across their
borders. Among these are military equipment or
technologies with potential military applications.

11. CONTROL IN THE TRANSFER OF PERSONS
 People are generally internationally mobile, although
less that capital, on a daily basis, people move from
one country to another for several reasons including
but not limited to tourism, education and work.
People who travel for the first two reasons i.e. tourism
and education do not affect factor endowment of the
host nation because they don’t work there. While
people who move to another nation for the main
purpose of work, do affect factor endowment of the
host nation.

12.  Unlike capital that is transferred between nations at a
low cost, people usually pay high measurable cost to
work in another country. If they move legally, they
must get immigration papers and pay for
transportation, even though most countries rarely give
these documents

13.  Two key motives for people movement
 1- Economic motives. People, whether professionals or
unskilled workers, mostly work in another country for
economic reasons. For example, Indonesian menial labor
workers doubled in Malaysia because they can make almost
ten times as much per day, as they could if at home.
 2- Political motives. People also move for political
reasons. For example, because of persecution or dangers of
war and other social instability, in which case they are
known as refugees and usually become part of the labor
pool in their new homelands i.e. where they find refugee
(e.g. people fleeing the wars in Iraq, Libya, Yemen, and
Syria).

14. CONTROL IN THE TRANSFER OF CAPITAL
 Capital, money or foreign exchange moves because of its importance in the
production process, for gaining bigger market share, for brand globalization,
for security of investment, to facilitate free trade among nations, and for the
fact that investors are always looking better and more returns on their
investments.
 Capital movement has its own effects on both home and host countries,
because capital is one of the most important factors of production that is
directly linked to globalization in so many aspects. When capital flies to a
foreign country, it creates better investment opportunities and batter chance to
initiate successful FDI. (Foreign Direct Investments)
 Additionally, new markets can emerge due to new investments and new
product lines for new trends and different life styles. New Products and
services come to the market due newly identified opportunities. The risk of
nationalizing the new investment is always kept on mind; where the
government can force individuals or multinationals to nationalize their
investment. Cross-border investment and losing the investment to foreign
hands is also a disadvantage that can occur from capital flight to a foreign
nation.

15.  There are two major types of investment that are
subject to government’s regulation: outward
investment when FDI flows out of the country (home
country’s MNCs invest) and inbound investment when
FDI enters the country (foreign MNCs make the
investment). Regarding the inbound investment, most
countries are aware of risks associated with letting the
FDI penetrate their economies but at the same time,
they also welcome it because of its multiple benefits.

16. CONTROL IN THE TRANSFER OF GOODS
 In order to safeguard the interest of the community government may ban or
limit the production of certain goods and services. For example, selling of guns,
explosive and dangerous drugs are illegal in many countries. Moreover, Goods
that harm the environment are also totally banned or strictly controlled in
many countries, e.g. aerosol cans that use CFCs, which has been banned
because of their damaging effect on the ozone layer.Most of the countries have
consumer protection laws aimed at making sure that businesses act fairly
towards their consumers: A few examples are
 Weight and Measures Act: goods sold should not be underweight. Standard
weighting equipments should be used to measure goods.
 Trade Description Act: deliberately giving misleading impression about the
product is illegal.
 Consumer Credit Act: According to this act consumers should be given a copy
of the credit agreement and should be aware of the interest rates, length of
loan while taking a loan.
 Sale of Goods Act: It is illegal to sell products with serious flaws or problems
and goods sold should conform to the description provided.

17. CONCLUSION
 The nature of the relationships between nation-states
and MNCs still remains a very up-to-date topic in
debates around the world, although this issue has been
subject to research and studies for several decades. It is
obvious that regardless of the economical status of the
country its first priority is to protect its citizens. It
would therefore always strive to control MNCs
carrying on business within its shores to ensure they
don’t use their, in most cases, enormous wealth to take
undue advantage of the people.