Author(s)

Shurui Gu ¹, Ping Liao ¹, Rui Wang ¹

Affiliation(s)

¹ School of Business, Guangzhou College of Technology and Business, Guangzhou, Guangdong, 510800, China

Corresponding Author

Ping Liao

ABSTRACT

This paper focuses on how enterprises can build and strengthen their international business risk management framework in the context of international trade friction, aiming to provide practical guidance for enterprises to cope with the complex international environment. By analysing the core risks of policy risk, operational risk and exchange rate risk (currency fluctuation), the paper not only reveals the specific impact of these risks on business operations, but also innovatively proposes multi-dimensional management strategies, such as establishing a flexible supply chain system, strengthening the policy early warning mechanism, and applying financial derivatives to hedge against exchange rate risk. The study analyses the quantitative impact of international trade friction on firms' market power by using cross-industry firms' market performance data from 2015 to 2023. The results show that the friction coefficients are significantly negative, which clearly points out the weakening effect of trade friction on firms' market position, and provides a powerful data support for the business community and policy makers. Finally, the study suggests that enterprises should strengthen the construction of risk management teams, deepen the understanding of international rules, and use digital tools to improve the efficiency of risk identification and response, so as to participate in global competition in a more robust manner.

KEYWORDS

International Trade Frictions, International Business Risks, Risk Management Strategies, Economic Globalization

CITE THIS PAPER

Shurui Gu, Ping Liao, Rui Wang, International Trade Friction and International Business Risk Management Strategies. Financial Engineering and Risk Management (2024) Vol. 7: 1-10. DOI: http://dx.doi.org/10.23977/ferm.2024.070501.

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