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Abstract Exporting and importing activity leads to more occasions for companies, but also involves higher risks. Although the environment for international trade has changed significantly over the years, the risks that firms deal when vending their merchandises and services in other countries remain basically the same. Before a company is expanding overseas, must be aware of the additional risks of the foreign trade market. Generally, the risks of conducting global business can be segmented into four main categories: country, financial, commercial and cross-cultural.
Key words:
International, trade, risk, business
JEL Codes:
G3
1. Introduction
The importance of international trade can be the providing of goods and services from one country to another provides employment, controls the cost of goods and services in the international market.
Therefore, a simple and clear definition of international trade can be: the exchange of goods and services among states, which leads to a global economy, where supply and demand or prices, affect and are affected by international events.
We may say that any business activity involves many risks of several types. Some risks can be more important for one kind of business than another. Because of these risks, firms are starting to ask some questions related to the threats that may affect their activity. The most important questions are: What is the commercial risk in international business? How do commercial risks arise in export import trade of international business? What are the factors caused for commercial risk under import export activity?
One of the main risks in exporting or importing is the absence of information about the global market. If a company which does not have accurate information about the region of sales where it fairs its merchandise, without doubt, it may fail in international business. So, the companies should study carefully about a foreign market.
Adaptability of your export product in foreign market plays a vital role in international market. Means, if your product can not have adaptability to change to the conditions of foreign market requirements, you may fail in exporting such product. With a simple example, I can explain...