countries should simultaneously encourage exports and discourage imports.
a situation where a government does not attempt to influence through quotas or duties what its citizens can buy from another country or what they can produce and sell to another country.
new trade theory
stresses that in some cases countries specialize in the production and export of particular products not because of underlying differences in factor endowments, but because in certain industries the world market can only support only a limited number of firms
advocates government intervention
one in whic a gain by one country results in a loss by another
in the production of a product when it is more efficient than any other country in producing it
the extent to which a country is endowed with such resources as land. labor, and capital.
suggest that countries should specialize in the production of those goods they produce most efficiently and buy goods that they produce less efficiently from other countries, even if this means buying goods from other countries that they could produce more efficiently at home
predicts that countries will export goods that make intensive use of those factors that are locally abundant, while importing goods that make intensive use of factors that are locally scarce
product life cycle
as products mature both the location of sales and the optimal production location will change affecting the flow and direction of trade
economies of scale
unit cost reductions accociated with a large scale of output.
first mover advantage
the economic and strategic advantages that accumulate to early entrants into an industry
shows why a nation achieves international success in a parifular industry and identifies four attributes that promote or slow down the creation of competitive advantage
refer to the nature of home demand for the industry's product or service
Relating and supporting industries
referd to the presence or absence of supplier industries and related industries that are internationally competitive
Firm strategy, structure, and rivalry
refers to the conditions governing how companies are created, organized, and managed, and the nature of domestic rivalry
government policy can
affect demand through product standards, influence rivalry through regulation and antitrust laws, and impact the availability of highly educated workers and advanced transportation infrastructure.
three main implications for international businesses
location, first mover, policy