International Trade Theory
International Trade Theory
Chapter Outline
OPENING CASE: The Ecuadorian Rose Industry
INTRODUCTION
AN OVERVIEW OF TRADE THEORY
The Benefits of Trade The Pattern of International Trade Trade Theory and Government Policy
MERCANTILISM
Country Focus: Is China a Neo-Mercantilist Nation?
ABSOLUTE ADVANTAGE
COMPARATIVE ADVANTAGE
The Gains from Trade Qualifications and Assumptions Extensions of the Ricardian Model Country Focus: Moving U.S. White Collar Jobs Offshore
HECKSCHER-OHLIN THEORY
The Leontief Paradox
THE PRODUCT LIFE CYCLE THEORY
Evaluating the Product Life Cycle Theory
NEW TRADE THEORY Increasing Product Variety and Reducing Costs Economies of Scale, First Mover Advantages and the Pattern of Trade Implications of New Trade Theory
NATIONAL COMPETITIVE ADVANTAGE: PORTER’S DIAMOND
Factor Endowments Demand Conditions Related and Supporting Industries Firm Strategy, Structure, Rivalry Evaluating Porter’s Theory Management Focus: The Rise of Finland’s Nokia FOCUS ON MANAGERIAL IMPLICATIONS
Location First-Mover Advantages Government Policy
SUMMARY
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: Trade in Information Technology and U.S. Economic Growth
Learning Objectives
1. Understand why nations trade with each other.
2. Be familiar with the different theories explaining trade flows between nations.
3. Understand why many economists believe that unrestricted free trade between nations will raise the economic welfare of all countries that participate in a free trade system.
4. Be familiar with the arguments of those who maintain that government can play a proactive role in promoting national competitive advantage in certain industries.
5. Understand the important implications that international trade theory holds for business practice.
Chapter Summary
This chapter focuses on
Chapter Outline
OPENING CASE: The Ecuadorian Rose Industry
INTRODUCTION
AN OVERVIEW OF TRADE THEORY
The Benefits of Trade The Pattern of International Trade Trade Theory and Government Policy
MERCANTILISM
Country Focus: Is China a Neo-Mercantilist Nation?
ABSOLUTE ADVANTAGE
COMPARATIVE ADVANTAGE
The Gains from Trade Qualifications and Assumptions Extensions of the Ricardian Model Country Focus: Moving U.S. White Collar Jobs Offshore
HECKSCHER-OHLIN THEORY
The Leontief Paradox
THE PRODUCT LIFE CYCLE THEORY
Evaluating the Product Life Cycle Theory
NEW TRADE THEORY Increasing Product Variety and Reducing Costs Economies of Scale, First Mover Advantages and the Pattern of Trade Implications of New Trade Theory
NATIONAL COMPETITIVE ADVANTAGE: PORTER’S DIAMOND
Factor Endowments Demand Conditions Related and Supporting Industries Firm Strategy, Structure, Rivalry Evaluating Porter’s Theory Management Focus: The Rise of Finland’s Nokia FOCUS ON MANAGERIAL IMPLICATIONS
Location First-Mover Advantages Government Policy
SUMMARY
CRITICAL THINKING AND DISCUSSION QUESTIONS
CLOSING CASE: Trade in Information Technology and U.S. Economic Growth
Learning Objectives
1. Understand why nations trade with each other.
2. Be familiar with the different theories explaining trade flows between nations.
3. Understand why many economists believe that unrestricted free trade between nations will raise the economic welfare of all countries that participate in a free trade system.
4. Be familiar with the arguments of those who maintain that government can play a proactive role in promoting national competitive advantage in certain industries.
5. Understand the important implications that international trade theory holds for business practice.
Chapter Summary
This chapter focuses on