The topic of Global Business, the views of economists tend to differ from those of the general public. There are three principal differences. First, many no economists believe that it is more advantageous to Business with other members of one’s country or groups than with outsiders. Economists see all forms of Business as equally advantageous. Second, many nonconformists believe that exports are better than imports for the economy. Economists believe that all Business is good for the economy. Third, many nonconformists believe that a country’s balance of Business is governed by the “competitiveness” of its salary rates, tariffs, and other factors. Economists believe that the balance of Business is governed by lots of factors, including the one above, but also including differences in national saving and investment.
All of the economic theories of Global Business suggest that it enhances efficiency. Business based on comparative advantage should benefit smaller countries more than large countries. That is because the benefits of comparative advantage are proportional to the difference between the relative prices in world markets and the relative prices that would prevail in home markets without Business. Another benefit from Business is that it promotes dynamism and innovation within an economy. An economy that is closed to Business is one in which inefficient industries and laggard firms are well protected. Moreover, studies suggest that barriers to Business are a major cause of extreme underdevelopment. The countries that are most closed to Business tend to be the poorest in the world.