Question

International business in the Aftermath of Corona Virus. based on the article from Italy coronavirus deaths at 5,476 after 651 rise: Live updates.

please and the question below thanks.

1. With all the deaths happening in Italy, China, and all around the world, what do you think the impact will be upon international business? Will it stop? Will it slow down? 2. Secondly, as students of international business I have to assume that you are interested in doing business abroad. Has this pandemic and the potential for more of these types of "Plagues" to occur discouraged you from engaging in international endeavors? Explain why or why not.

Answer 1

1.

It will not stop fully but definitely slow down.

International advantage depends on comparative advantage – the country having comparative advantage on producing goods used to export to other countries. Such comparative advantage is the lower opportunity cost of producing; suppose Japan has comparative advantage in producing electronics goods and India has comparative advantage in producing garments; therefore, Japan exports electronics goods to India and India exports garments to Japan. In this way international business goes on. But due to Coronavirus outbreak most of the countries are in lockdown; they seal their borders for any sort of exchanging; this certainly hampers international business now but it may not sustain for long because of the growing need for specialization – the country has comparative advantage must be specialized in that work.

The pandemic is severe now and taking lives; but one day will come in future when this will be over. The international business will slowly start then.

2.

Answer: no; this should not happen.

Any sort of business has to carry some risks. International business is not out of it, since it carries exchange rate risk, fall in demand risk, the risk of communal disturbance, political risk, and natural calamity. It will add one more there, which could be termed as epidemic or pandemic risk; while considering return on international business, this risk is also to be considered and there would be a provision out of profit. The show must go on in future.