Influence of International Trade Agreements on International Business: A Conceptual Model

Abstract

The article provides a conceptual model, developed from analyzing over fifty trade agreement related research studies published during the last decade, which allows international business scholars to explore the influence of trade agreements (custom unions, free trade agreements, preferential trade agreements, regional trade agreements) on foreign market entry strategies. This model is an attempt to develop IB theory to address the current research gap in this very narrow but important allied field. Empirical findings generated by interviewing dairy produce exporters in New Zealand reveal a remarkable connection between TAs and IB, with TAs found to influence the regulative environment of participating countries, which may in turn reduce the regulative distance between member nations. The contribution provides a basis for IB researchers to explore this connection in multiple industries/countries.

KEYWORDS:

• international business
• international economics
• trade agreements
• World Trade Organization