International business consists of trades and transactions at a global level. These include the trade of goods, services, technology, capital and/or knowledge.
It involves cross-border transactions of goods and services between two or more countries. Transactions of economic resources include capital, skills, and people for the purpose of the international production of physical goods and services such as finance, banking, insurance, and construction. International business is also known as globalization. Globalization refers to the international trade between countries, which in turn refers to the tendency of international trade, investments, information technology and outsourced manufacturing to weave the economies of diverse countries together. To conduct business overseas, multinational companies need to separate national markets into one global marketplace. In essence there are two macro factors that underline the trend of greater globalization. The first macro-factor consists of eliminating barriers to make cross-border trade easier, such as the free flow of goods and services, and capital. The second macro-factor is technological change, particularly developments in communication, information processing, and transportation technologies.
"International business" is also defined as the study of the internationalization process of multinational enterprises. A multinational enterprise (MNE) is a company that has a worldwide approach to markets, production and/or operations in several countries. Well-known MNEs include fast-food companies such as: McDonald's (MCD), YUM (YUM), Starbucks Coffee Company (SBUX), Microsoft (MSFT), etc. Other industrial MNEs leaders include vehicle manufacturers such as: Ford Motor Company, and General Motors (GMC). Some consumer-electronics producers such as Samsung, LG and Sony, and energy companies such as Exxon Mobil, and British Petroleum. Multinational enterprises range from any kind of business activity or market, from consumer goods to machinery manufacture; a company can become an international business. Therefore, to conduct business overseas, companies should be aware of all the factors that might affect any business activities, including, but not limited to: difference in legal systems, political systems, economic policy, language, accounting standards, labor standards, living standards, environmental standards, local cultures, corporate cultures, foreign-exchange markets, tariffs, import and export regulations, trade agreements, climate, education. Each of these factors may require changes in how companies operate from one country to the next. Each factor makes a difference and a connection.
One of the first scholars to engage in developing a theory of multinational companies was Stephen Hymer. Throughout his academic life, he developed theories that sought to explain foreign direct investment and why firms become multinational.
There were three phases according to Hymer's work. The first phase of Hymer's work was his dissertation in 1960 called the International Operations of National Firms. In this thesis, the author departs from neoclassical theory and opens up a new area of international production. At first, Hymer started analyzing neoclassical theory and the financial investment, where the main reason for capital movement is the difference in interest rates. Then, he started analyzing the characteristics of foreign investment by large companies for production and direct business purposes, calling this Foreign Direct Investment. By analyzing the two types of investments, Hymer distinguished financial investment from direct investment. The main distinguishing feature was control. Portfolio investment is a more passive approach, and the main purpose is financial gain, whereas foreign direct investment a firm has control over the operations abroad. So, the traditional theory of investment based on differential interest rates does not explain the motivations for foreign direct investment (FDI).
According to hymer, there are two main determinants of Foreign Direct Investment (FDI) where an imperfect market structure is the key element. The first is the firm-specific advantages which are developed at the specific companies home country and, profitably, used in the foreign country. The second determinant is the removal of control where Hymer wrote: "When firms are interconnected, they compete in selling in the same market or one of the firms may sell to the other," and because of this "it may be profitable to substitute centralized decision-making for decentralized decision-making".
The second phase is his neoclassical article in 1968 that includes a theory of internationalization and explains the direction of growth of the international expansion of firms. In a later stage, Hymer went to a more Marxist approach where he explains that MNC as agents of an international capitalist system causing conflict and contradictions, causing among other inequality and poverty in the world. Hymer is the father of the theory of MNE", and explains the motivations for companies doing direct business abroad.
Among modern economic theories of multinationals and foreign direct investment are internalization theory and John Dunning'sOLI paradigm. Dunning was widely known for his research in economics of international direct investment and the multinational enterprise. His OLI paradigm, in particular, remains as the predominant theoretical contribution to study international business topics. Hymer and Dunning are considered founders of international business as a specialist field of study.
Physical and social factors of competitive business and social environment
The conduct of international operations depends on a company's objectives and the means with which they carry them out. The operations affect and are affected by the physical and societal factors and the competitiveenvironment.
All firms that want to go international have one goal in common; the desire to increase each their economic value when engaging in international trade transactions. To accomplish this goal, each firm must develop its individual strategy and approach to maximize value, lower costs, and increase profits. A firm’s value creation is the difference between V (the value of the product being sold) and C (the cost of production per each product sold).
Value creation can be categorized as: Primary activities (R&D, production, marketing and sales, customer service) and as Support activities (Information systems, logistics, human resources). All of these activities must be managed effectively and be consistent with the firm strategy. However, the success of firms that extend internationally depends on the goods or services sold and on the firm's core competencies (Skills within the firm that competitors cannot easily match or imitate). For a firm to be successful, the firm's strategy must be consistent with the environment in which the firm operates. Therefore, the firm needs to change its organizational structure to reflect changes in the setting in which they are operating and the strategy they are pursuing.
Once a firm decides to enter a foreign market, it must decide on a mode of entry. There are six different modes to enter a foreign market, and each mode has pros and cons that are associated with it. The firm must decide which mode is most appropriately aligned with the company's goals and objectives. The six different modes of entry are exporting, turnkey projects, licensing, franchising, establishing joint ventures with a host-country firm, or setting up a new wholly owned subsidiary in the host country.
The first entry mode is exporting. Exporting is manufacturing the product in a centralized location and exporting it to other national markets. In this way, the firm may realize a substantial scale of economies from its global sales revenue. As an example, many Japanese automakers made inroads into the U.S. market through exporting. There are two primary advantages to exporting: Avoidance of the high costs of establishing manufacturing in a host country and gaining an experience curve. Some possible disadvantages to exporting are high transport costs and high tariff barriers.
The second entry mode is a Turnkey project. In a turnkey project, an independent contractor is hired by the company to oversee all of the preparation for entering a foreign market. Once the preparation is complete and the end of the contract is reached, the plant is turned over to the company fully ready for operation.
Licensing and franchising are two additional entry modes that are similar in operation. Licensing allows a licensor to grant the rights to an intangible property to the licensee for a specified period of time for a royalty fee. Franchising, on the other hand, is a specialized form of licensing in which the franchisor sells the intangible property to the franchisee, and also forces the franchisee operate as dictated by the franchisor.
Lastly, a joint venture and wholly owned subsidiary are two more entry modes in international business. A joint venture is when a firm created is jointly owned by two or more companies (Most joint venture are 50-50 percent partnership). This is in contrast with a wholly owned subsidiary, when a firm owns 100 percent of the stock of a company in a foreign country because it has either set up a new operation or acquires an established firm in that country.
Types of Operations
Exports and imports of merchandise:
- Merchandise exports: goods exported, not including services.
- Merchandise imports: The physical good or product that is imported into the respective country. Countries import products or goods that their country lacks in. An example of this is Colombia imports cars since there is no Colombian car company.
- Service exports: is te fastest growing export sector actually. The majority of the companies create a product that requires installation, repairs, and troubleshooting, Service exports is simply a resident of one country providing a service to another country. A cloud software platform used by people or companies outside the home country.
- "Tourism and transportation, service performance, asset use".
- Exports and Imports of products, goods or services are usually a country’s most important international economic transactions.
Top Imports and Exports In The World
|Partner Name||Export (US$ Thousand)||Import (US$ Thousand)||Import Partner Share (%)||Export Partner Share (%)|
Choice of entry mode in international business
Strategic variables impact the choice of entry mode for multinational corporation expansion beyond their domestic markets. These variables are global concentration, global synergies, and global strategic motivations of MNC.
- Global concentration: many MNEs share and overlap markets with a limited number of other corporations in the same industry.
- Global synergies: the reuse or sharing of resources by a corporation and may include marketing departments or other inputs that can be used in multiple markets.
- Global strategic motivations: other factors beyond entry mode that are the basic reasons for corporate expansion into an additional market. These are strategic reasons that may include establishing a foreign outpost for expansion, developing sourcing sites among other strategic reasons.
Means of businesses
- Entry modes: Export/import, wholly owned subsidiary, merger or acquisition, alliances and joint ventures, licensing 
- Modes: importing and exporting, tourism and transportation, licensing and franchising, turnkey operations, managementcontracts, direct investment and portfolio investments.
- Functions: marketing, global manufacturing and supply chain management, accounting, finance, human resources
- Overlaying alternatives: choice of countries, organization and control mechanisms
Physical and social factors
- Geographical influences: There are many different geographical factors that affect international business. These factors are: the geographical size, the climatic challenges happening throughout the world, the natural resources available on a specific territory, the population distribution in a country, etc.
- Social factors: Political policies: political disputes, particularly those that result in the military confrontation, can disrupt trade and investment.
- Legal policies: domestic and international laws play a big role in determining how a company can operate overseas.
- Behavioral factors: in a foreign environment, the related disciplines such as anthropology, psychology, and sociology are helpful for managers to get a better understanding of values, attitudes, and beliefs.
- Economic forces: economics explains country differences in costs, currency values, and market size.
To achieve success in penetrating a foreign market and remaining profitable, efforts must be directed towards the planning and execution of Phase I. The use of conventional SWOT analysis, market research, cultural researches, will give the firm the appropriate tools to reduce risk of failure abroad. Risks that arise from poor planning include: large expenses in marketing, administration and product development (with no sales), disadvantages derived from local or federal laws of a foreign country, lack of popularity because of a saturated market, vandalism of physical property due to instability of country, etc. There are also cultural risks when entering a foreign market, lack of research and understanding of local customs can lead to alienation of locals and brand dissociation.  Strategic risks can be defined as the uncertainties and untapped opportunities embedded in your strategic intent and how well they are executed. As such, they are key matters for the board and impinge on the whole business, rather than just an isolated unit.
A company has to be conscious about the production costs to not waste time and money. If the expenditures and costs are controlled, it will create an efficient production and help the internationalization. Operational risk is the prospect of loss resulting from inadequate or failed procedures, systems or policies. Employee errors. Systems failures. Fraud or other criminal activity. Any event that disrupts business processes.
How a government governs a country can affect the operations of a firm. The government might be corrupt, hostile, totalitarian, etc., and has a negative image around the globe. A firm’s reputation can change if it operates in a country controlled by that type of government. Also, an unstable political situation can be a risk for multinational firms. Elections or any political event that is unexpected can change a country's situation and put a firm in an awkward position. Political risks are the likelihood that politicalforces will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. Political risk tends to be greater in countries experiencing social unrest. When political risk is high, there is a high probability that a change will occur in the country's political environment that will endanger foreign firms there.Corrupt foreign governments may also take over the company without warning as seen in Venezuela.
Technological progress brings many benefits, but some disadvantages, including "lack of security in electronic transactions, the cost of developing new technology ... the fact that this new technology may fail, and, when all of these are coupled with the outdated existing technology, [the fact that] the result may create a dangerous effect in doing business in the international arena."
Companies that establish a subsidiary or factory abroad need to be conscious about the externalizations they will produce, as some may have negative effects such as noise or pollution. This may cause aggravation to the people living there, which in turn can lead to a conflict. People want to live in a clean and quiet environment, without pollution or unnecessary noise. If a conflict arises, this may lead to a negative change in customer's perception of the company. Actual or potential threat of adverse effects on living organisms and environment by effluents, emissions, wastes, resource depletion, etc., arising out of an organization's activities is considered to be risks of the environment. As new business leaders come to fruition in their careers, it will be increasingly important to curb business activities and externalizations that may hurt the environment.
These are the economic risks explained by Professor Okolo: "This comes from the inability of a country to meet its financial obligations. The changing of foreign-investment or/and domestic fiscal or monetary policies. The effect of exchange-rate and interest rate make it difficult to conduct international business." Moreover, it can be a risk for a company to operate in a country and they may experience an unexpected economic crisis after establishing the subsidiary. Economic risks is the likelihood that economic management will cause drastic changes in a country's business environment that hurt the profit and other goals of a business enterprise. In practice, the biggest problem arising from economic mismanagement has been inflation. Historically many governments have expanded their domestic money supplying misguided attempts to stimulate economic activity.
According to Professor Okolo: "This area is affected by the currency exchange rate, government flexibility in allowing the firms to repatriate profits or funds outside the country. The devaluation and inflation will also impact the firm's ability to operate at an efficient capacity and still be stable." Furthermore, the taxes that a company has to pay might be advantageous or not. It might be higher or lower in the host countries. Then "the risk that a government will indiscriminately change the laws, regulations, or contracts governing an investment—or will fail to enforce them—in a way that reduces an investor’s financial returns is what we call 'policy risk.'"
Terrorism is a voluntary act of violence towards a group(s) of people. In most cases, acts of terrorism is derived from hatred or ignorance of religious, political and cultural beliefs. An example was the infamous 9/11 attacks were labeled as terrorism due to the unacceptable of western culture by the radical Islamic groups. Terrorism not only affects civilians, but it also has a negative impact towards corporations and other businesses. These impacts may include: physical vandalism or destruction of property, sales declining due to frightened consumers and governments issuing public safety restrictions. Firms engaging in international business will find it difficult to operate in a country that has an uncertain assurance of safety from these attacks.
Bribery is the act of receiving or soliciting of any items or services of value to influence the actions of a party with public or legal obligations. This is considered to an unethical form of practicing business and can have legal repercussions. Firm that want to operate legally should instruct employees to not involve themselves or the company in such activities. Companies should avoid doing business in countries where unstable forms of government exist as it could bring unfair advantages against domestic business and/or harm the social fabric of the citizens.
Factors that influenced the growth in globalization of international business
There has been growth in globalization in recent decades due to (at least) the following eight factors:
Importance of international business education
- Most of the companies are either international companies or compete with other international companies.
- Modes of operation may differ from those used domestically.
- The best way of conducting business may differ by country.
- An understanding helps one make better career decisions.
- An understanding helps one decide what governmentalpolicies to support.
Managers in international business must understand social science disciplines and how they affect different functional business fields.
To maintain and achieve successful business operations in foreign nations, you must understand how variations in culture and traditions across nations effect business practices. This idea is known as cultural literacy. Considering strategy when entering foreign markets can become complicated when you only have your own home country's culture to refer to. This can create a blind spot during the decision making process and result in ethnocentrism. Education on international business introduces the student to new concepts that can be applicable in international dilemmas such as marketing and operations.
Importance of language/cultural studies in international business
A considerable advantage in international business is gained through the knowledge and use of language. Advantages of being an international businessperson who is fluent in the local language include the following:
- Having the ability to directly communicate with employees and customers
- Understanding the manner of speaking within business in the local area to improve overall productivity
- Gaining respect of customers and employees from speaking with them in their native tongue
In many cases, it is truly impossible to gain an understanding of a culture's buying habits without first taking the time to understand the culture. Examples of the benefit of understanding local culture include the following:
- Being able to provide marketing techniques that are specifically tailored to the local market
- Knowing how other businesses operate and what might or might not be social taboos
- Understanding the time structure of an area. Some societies are more focused on "being on time" while others focus on doing business at "the right time".
- Associating with people who do not know several languages.
- Language barriers can have an impact on transaction costs. Linguistic distance is defined as the amount of variation one language has from another. For example, English, French, and Spanish are all languages derived from Latin. When evaluating dialogue in these languages, you will discover many similarities. However, languages such as English and Chinese or English and Arabic vary way more and contain no similarities. The alphabet and writing of these languages are also different. The large the linguistic distance there, the wider language barriers to cross and these differences can reflect on transaction costs and make foreign business operations more expensive.
Importance of studying international business
The international business standards focus on the following:
- raising awareness of the inter-relatedness of one country's political policies and economic practices on another;
- learning to improve international business relations through appropriate communication strategies;
- understanding the global business environment—that is, the interconnections of cultural, political, legal, economic, and ethical systems;
- exploring basic concepts underlying international finance, management, marketing, and trade relations; and
- identifying forms of business ownership and international business opportunities.
By focusing on these, students will gain a better understanding of Political economy. These are tools that would help future business people bridge the economic and political gap between countries.
There is an increasing amount of demand for business people with an education in international business. A survey conducted by Thomas Patrick from University of Notre Dame concluded that bachelor's degree and master's degree holders felt that the training received through education were very practical in the working environment. Increasingly, companies are sourcing their human resource requirement globally. Sony Corporation, for example has only fifty percent of its employees who are Japanese. Business people with an education in international business also had a significantly higher chance of being sent abroad to work under the international operations of a firm.
The following table provides descriptions of higher education in international business and its benefits.
|Who is this degree for||People interested in management careers with multinational companies||People who are interested in academic or research careers|
|Common career paths (with approximate median annual salary)||- Chief executives ($167,000)* |
- General or operations managers ($95,000)*
|- University business professors ($75,000)* |
- Economists ($91,000)*
|Time for completion||1–2 years full-time||3–5 years in addition to master's or other foundational coursework|
|Common graduation requirements||- Roughly 15-20 graduate level courses |
- Internship or study abroad program
- Foreign language requirement
|Most (or all) of the master's degree requirements, plus: |
- At least 12 more graduate level courses
- Ph.D. qualifier exams
- Dissertation prospectus (proposal)
- Teaching requirement
|Prerequisites||Bachelor's degree and work experience, quantitative expertise||Bachelor's or master's degree in business or related field|
- Daniels, J., Radebaugh, L., Sullivan, D. (2014). International Business: environment and operations, 15th edition. Prentice Hall.
- Daniels, John D., Lee H. Radebaugh, and Daniel P. Sullivan. Globalization and business. Prentice Hall, 2002.
- ^Staff, Investopedia (2003-11-20). "Globalization". Investopedia. Retrieved 2017-10-12.
- ^Buckley P.J. (2010) Stephen Hymer: Three Phases, One Approach?. In: Foreign Direct Investment, China and the World Economy. Palgrave Macmillan, London
- ^Hill, Charles W. L. (2005). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. p. 382. ISBN 007811277X. Retrieved 2017-11-26.
- ^Hill, Charles W. L. (2005). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. p. 383. ISBN 007811277X. Retrieved 2017-11-26.
- ^Hill, Charles W. L. (2014). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. pp. 453–454. ISBN 007811277X.
- ^Hill, Charles W. L. (2014). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. p. 454. ISBN 007811277X.
- ^Hill, Charles W. L. (2014). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. pp. 454–455. ISBN 007811277X.
- ^Hill, Charles W. L. (2014). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. pp. 456–457. ISBN 007811277X.
- ^Hill, Charles W. L. (2014). International Business: Competing in the Global Marketplace (10 ed.). Boston: McGraw-Hill Higher Education. pp. 457–458. ISBN 007811277X.
- ^What is Merchandised Exports. The Law Dictionary. Accessed 30 September 2015.
- ^ abcDaniels, J., Radebaugh, L., Sullivan, D. (2007). International Business: environment and operations, 11th edition. Prentice Hall. International Business can also be referred as globalization. Globalization refers to the shift toward a more integrated and interdependent economy In order to conduct business overseas, multinational companies need to separate national markets into one huge global marketplace. Two macro factors underline the trend of greater globalization. The first is falling of barriers to make cross-border trade easier such as the free flow of goods and services, and capital. The second factor is technological change, particularly the developments in communication, information processing, and transportation technologies. Usually, private companies undertake transactions for profit; governments undertake such transactions for profit and for political reasonsISBN 0-13-186942-6
- ^"The World Factbook — Central Intelligence Agency". www.cia.gov. Retrieved 26 November 2017.
- ^Kim, W. C., & Hwang, P. (1992). Global strategy and multinationals' entry mode choice. Journal of International Business Studies, 23(1), 29. Accessed 30 September 2015.
- ^Luthans, F., Doh, J. P. (2015). International Management: Culture, Strategy and Behavior, 9th edition. McGraw Hill. ISBN 0-07786244-9
- ^Witiger, (2012). The Physical/Geographic Environment. Accessed 30 September 2015.
- ^ abcdefgOkolo, S. (n.d.). Global Business: Risks in International Business. [online] Globalpaarisite.blogspot.com.es. Available at: http://globalpaarisite.blogspot.com.es/2012/08/risks-in-international-business.html [Accessed 10 May 2015].
- ^ abcJ. Henisz, W. and A. Zelner, B. (2010). Hidden Risks in Emerging Markets. Harvard Business Review. Accessed 9 May 2015.
- ^ abCharles H.L Hill
- ^INTERNATIONAL BUSINESS. Tata McGraw-Hill Education. ISBN 9781259051166.
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(MoneyWatch) -- A number of global corporations are recovering their optimism about the economy, and one result is an increase in overseas job transfers.
According to the latest survey by Brookfield Global Relocation Services, 61 percent of international conglomerates are expecting to transfer more employees in 2011 than in recent years. The company's Executive Vice President, Scott Sullivan, cites a rise in the number of mature economies, ease of market access, and acceptance of international businesses as key criteria corporations consider when expanding into a foreign market.
While companies are increasingly optimistic about global relocations, 75 percent of them reduced assignment budgets overall. Two factors allow companies to transfer employees internationally while still managing costs according to Sullivan: Shorter stints and a younger workforce.
Sullivan explains that housing for international assignees depends on budget, tenure and familial status and can be described as either good, excellent or superior:
- Good accommodations are located in areas populated by both international assignees and locals and cater to employees who have lived overseas or are on a limited budget. Homes in these areas offer access to local culture at reasonable prices.
- Excellent level neighborhoods are located in more traditional expatriate neighborhoods and tend to be closer to international schools and shopping. Though there is still interaction with the local population, these neighborhoods serve those transferees moving with a spouse and family in tow.
- Superior level accommodations are reserved for those with the most seniority and biggest budget. Though familial status does play into the size of the property leased to the assignee, these homes are available to nearly anyone that can pay for them. They are located in exclusive expatriate communities and offer familiar features of home - cuisine from the expatriates' home country, schools that teach in the transferee's native language and more 'Western'-style finishes.
These 10 countries hold an attraction for businesses due to large consumer populations, a good supply of resources or labor and established or emerging presences in the global marketplace. These factors make them the most frequently selected locations for global assignments.
In 2011, 14 percent of global companies cited China as one of the top ten international relocation destinations. With over 1.3 billion people, China is home to over 19 percent of the world's population, making it a first stop for many companies looking for access to a huge marketplace.
Many international companies also outsource labor to China which requires them to transfer managers to oversee operations. Shanghai is one of the most popular cities with expatriates because of its port location and influence over the financial, commerce and technology industries.
According to Mercer's 2011 Cost of Living Survey, a renter can expect to spend over $3,300 per month on a luxury unfurnished two bedroom apartment.
2. United Kingdom
Fourteen percent of companies selected the UK most frequently for their overseas transfers. Not surprisingly, London is one of the most popular destinations for international assignees, due much in part to its status as the largest metropolitan area in the United Kingdom.
According to Sullivan, the real drivers of international business in the UK are financial and banking services. London itself is one of the most important financial centers in the world, vying with New York City as the most important location for international finance.
Four percent of companies identified Singapore as a top relocation destination. That's no surprise »»" according to Sullivan, Singapore is very welcoming to Western businesses and has open regulations when it comes to allowing international businesses into the country. There is a lot of transparency and Western companies have long-standing consumer bases in Singapore.
The island country is the fourth leading financial center in the world and home to one of the five busiest ports in the world. Singapore has a highly developed market-based economy and relies heavily on exports, refining imported goods and manufacturing.
The country also has the highest percentage of millionaire households with over 15 percent worth 1 million or more U.S. dollars.
Luxury apartments start around $3,200 a month according to Mercer's index.
Germany is tied with Singapore at 4 percent when it comes to top international destinations for transferees. Sullivan points to Germany's large consumer market and status as a European financial leader as key factors in determining Germany's popularity for international transfers.
The country's capital of Berlin is the most popular city for expatriates and is known primarily for its service-based economy. While the service sector is the backbone of Berlin, other burgeoning industries include pharmaceuticals, IT, biotechnology and renewable energy.
The city is well known for its high quality of living and access to culture and nightlife. Average rents for two bedroom apartments start at $1,600 a month.
As always, this range changes depending on amenities, finishes and location.
Four percent of employers cite the Netherlands as a top destination for international assignees. According to Sullivan, the Netherlands is home to a very open marketplace with an emphasis in the professional services.
Four percent of employers cite the Netherlands as a top destination for international assignees. According to Sullivan, the Netherlands is home to a very open marketplace with an emphasis in the professional services.
The hub of international business is Amsterdam, the financial and cultural capital of the Netherlands. It is home to the Amsterdam Stock Exchange, the oldest stock exchange in the world, and seven of the world's top 500 companies are based here.
The European Cities Monitor rates Amsterdam one of the top five European cities in which to locate an international business, a statistic many global companies have taken to heart. Expect to spend roughly $2,300 per month for an unfurnished corporate rental.
Australia ranks in the middle of the list, with 4 percent of global employers choosing to send international assignees to this down under location. Sullivan explains that Australia is an important venue for companies sourcing raw materials.
Canberra, the capital city, is the most popular city for expatriates. The bustling metropolis is ranked one of the top ten most livable cities in the world according the The Economist and has a reputation for international commerce. In addition to Australia's wealth of natural resources, Sydney itself proves to be a vital reserve.
Four of the 10 largest corporations by revenue have headquarters in Sydney and the city is home to the main offices of more than 500 multinational corporations. International assignees can expect to pay over $2,700 per month for a two bedroom apartment in the city.
7. Hong Kong
This Chinese city-state is home to 3 percent of international assignees. Though technically a part of China, this sprawling city gets its own place on the list due to its independent political system and long history as a British colony.
Hong Kong is one of the world's leading financial centers and its currency, the Hong Kong Dollar, is the ninth most traded currency in the world. It is an international finance center and boasts the biggest concentration of corporate headquarters in Asia.
Hong Kong was ranked second behind Singapore in World Bank's Ease of Doing Business Index which makes it a shoe-in for financial companies looking to expand globally. Access to this relaxed capitalist structure and developed market does not come cheap - luxury two bedroom apartments average over $5,700 a month according to Mercer's. And with better locations and more "Westernized" finishes those prices can quickly rise.
In 2010, 3 percent of global businesses selected Brazil as a location for international assignments due in large part to its importance in the commodities and energy markets. Sullivan points to the long-term consumer market available to global businesses as one of the key factors that make Brazil a top ten contender.
Sao Paulo, the largest city in Brazil, is one of the most popular cities for emigrants and ranks among the five largest metropolitan areas on the planet. Sixty three percent of international businesses that have divisions in Brazil house their headquarters in Sao Paulo, making it a hub of commerce for the entirety of South America. Average rental rates for an unfurnished apartment start around $2,300 per month.
Two percent of global employers cite India as a location for international assignments. Many of the assignees are sent to Mumbai, the most populous city in India and the sixth most populous in the world. It is the commercial center of India, generating nearly 5 percent of its GDP and 25 percent of its industrial output.
The city is home to many important financial institutions, including the National Stock Exchange of India, and the headquarters of many Indian and multinational corporations. Like Brazil, India offers a developing consumer market due to sheer population and has benefited dramatically from the outsourcing boom of the early 21st century. The average rent for a luxury two bedroom apartment in Mumbai starts around $3,500 per month, according to Mercer's Index.
According to Sullivan, Belgium's stable environment and position as one of the founders of the European Union make it a top relocation destination. Roughly 2 percent of companies assigned transferees to Belgium, with many of them landing in Brussels, the country's largest urban area.
Belgium's economy is heavily service-oriented and imports a variety of goods including raw materials and diamonds, chemicals, pharmaceuticals and oil products. It exports plenty of goods, too, including finished diamonds, metals and metal products.
The economy is strongly globalized, making it a mecca of international business. Global assignees can expect to pay roughly $2,000 a month on rent.
Would you like your employer to transfer you overseas?