International Parity Conditions and the Possible Impact on the International Business Operations: The Case of Turkey

International Parity Conditions and the Possible Impact on the International Business Operations: The Case of Turkey

Aytaç Gökmen (Çankaya University, Ankara, Turkey) and Dilek Temiz Dinç (Çankaya University, Ankara, Turkey)
Copyright: © 2016 |Pages: 13
DOI: 10.4018/IJSEM.2016040101


There is not only one currency and an exact predictable parity for each currency in the globe. This makes the accomplishment of international business and trade operations complicated owing to the fact that the mandatory usage of strong currencies in international trade. However, business cycles, alternating macroeconomic variables, political conditions and government interventions impact on the value of currencies and international parity conditions. Turkey is at the convergence of Eurasia and serves as a trade route among many regions. It also derives a considerable part of its GDP from international trade operations. However, the variations in the international trade volume, foreign exchange operations and international parity conditions impact on the economic and commercial potential sweepingly. Thus, the objective of this paper is to review the international business and trade potential of the Republic of Turkey with respect to foreign exchange and international parity conditions depending on credible national and international publications.
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2. The Importance Of The Operations Of International Business And The Reasons For The Expansion Of Their Operations

International business is the form of commercial and investment operations which transcend national borders. The framework of the international business operations is the outmost possible free circulation of the goods, services, ideas, financial capital, human resources, knowledge and technology globally. By all means, these international operations affect countries economically, financially, politically and culturally (Çavuşgil et al., 2012, pp. 40-41; Dlabay, Burrow, 2008, pp. 372; Paul, 2007, pp. 5-7).

The fundamental issue in international business is the realization of economic and commercial operations beyond the national frontiers. These operations may unveil in different forms. Yet, the basic forms of international business operations are exportation, importation, portfolio investments and foreign direct investments (FDI). With this respect, international businesses plan, organize and execute heir operations on a global scale. They are supposed to explore foreign investment opportunities as well as cooperate and compete with the other firms dealing with international business affairs. Moreover, international businesses do not only cooperate and compete with individual businesses, they also cooperate and compete with group of businesses and states owing to the commercial, economic and investment policies of various governments (Çavuşgil et al., 2012, pp. 40-41; Dlabay, Burrow, 2008, p. 373; Paul, 2007, pp. 5-7; Griffin, Pustay, 1999, p. 8).

The expanding importance of international business overlaps with the convergence of national markets by means of the increasing significance of globalization. With the advent of the ever increasing importance of globalization, the national borders of countries began to decline regarding to economic and commercial terms, market convergence rate began to increase as well as the production and sales of goods and services in different national markets have been substantially facilitated. Therefore, as the volume of the operations of international businesses expand, the economic and commercial interdependency of countries increase too. Then, this turn into global economic, financial and commercial interdependency of firms and states. This process could also be beneficial for businesses in order to increase their volumes of business, sales and profit, for states to increase the government taxation and related income sources and for consumers to have access to wider choices of goods and services. This process would also facilitate the states, firms and individuals to have access to updated knowledge, technology, managerial experience and know-how as well (Çavuşgil et al., 2012, pp. 40-43; Cherunilan, 2007, pp. 1-4; Paul, 2007, pp. 7-10; Griffin, Pustay, 1999, pp. 13-14).

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