economic, political and legal (easier copyright, regs on people / env't)
cheaper to produce / sell, Economies of scale - low cost of production
too much, too little, they're there
Nation’s wealth depends on accumulation of treasure Country’s need surplus to thrive Maximize exports through incentives Minimize imports through penalties But will people if everyone is doing it – does it work – kind of like the ‘buy local movement’ Still happening in developing countries and/or communist countries
What is this?
Early in a product's cycle all the parts and labor associated with that product come from the area in which it was invented. After the product becomes adopted and used in the world markets, production gradually moves away from the point of origin . In some situations, the product becomes an item that is imported by its original country of invention. (comparative advantage changes too then!)
Protecting infant industries. Highly technical, and predicted the possibilities of national specialization-by-industry . Sometimes leads to Monopolistic Competition.
A nation can create new advanced factors (such as skilled labor, a strong technology and knowledge base, government support, and culture.) vs. relying on natural competitive advantage.
Mark6 slidedeck - Overview of International Marketing Theories of Trade
international marketing Presented by Lindsey Fair
absolute advantage A nation has a monopoly on a product or can produce it at the lowest cost . And has the ability to produce something with fewer resources than other producers would use to produce the same thing.
comparative advantage A country, individual, company or region can produce a good at a lower opportunity cost than that of a competitor.
heckscher-ohlin model A capital -abundant country will export the capital-intensive good, while the labor -abundant country will export the labor-intensive good.
product cycle theory production gradually moves away from the point of origin
linder theory The more similar the demand structures of countries, the more they will trade with one another. (a.k.a. Country Similarity Theory)
krugman’s model national specialization-by-industry
diamond of national advantage create new advanced factors vs. relying on natural competitive advantage.