International trade involves the exchange of goods or services and other factors of production, such as labor and capital, across international borders.

On the other hand, international finance studies the flow of financial assets or investment across borders. International trade and finance became possible across nations only due to the emergence of globalization.

Globalization can be defined as an integration of economics all over the world. It involves an exchange of technological, economic, and political factors across nations due to advancement in communication, transportation, and infrastructure systems.

With the advent of globalization, there is a rapid increase in the free flow of goods and services, capital, labor and finance between nations. The consequences of globalization can be negative or positive.