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Terms in this set (13)
Theory of Resource Endowments
Eli Hecksher and Bertil Ohlin.
Theory of Overlapping Demand
IPLC- Acronym, Creator, Stages
International Product Life Cycle- Ray Vernon
Stages: 1. New Product- Innovation/ Exportation
2. Maturing Product- Foreign Production Begins, foreign competition appears in export market states
3. Standardized Product- Import competition appears in the U.S.
British economist whose work on economic theory helps explain why in many industries firms tend to cluster together on a geographic basis: (Name, 3 reasons)
Reasons: 1. Pooling of common labor force = staffing requirements met quickly.
2. Specialized local suppliers can coordinate their operation skills with the needs of buyers.
3. Technological info can be easily shared, enhancing innovation.
1. Demand conditions
2.Factor Conditions- Basic vs advanced
3.Related & Supporting industries (cluster)
-also gov't policies.
BV of FDI in 2014
How much did U.S. corporations have invested abroad in 2014?
United Nations Conference Trade and Development
Publishes all data on FDI.
Estimates 82,000 TNCs w/ internal production activities. These TNCs account for 25% of total global output and 2/3 global trade.
Monopolistic Advantage Theory:
Name, country, idea
Steven Hymer, USA
Most FDI occurs in oligopolistic industries.
Once you have advantage, get a patent and transfer it to yourself in another country.
Market Imperfections Theory
Richard Caues, Britain
Transferring the market imperfections so you instead do FDI- internalizing.
Buckley & Casson- Cake example. To get a higher return on investment, a firm will transfer its superior knowledge to a foreign subsidiary that it controls rather than sell it on the open market.
Knickerbocker- If one of those oligopolies opens a firm in a foreign market, you dont just let them do it- you follow them.
Eclectic Theory of International Production
John Dunning- Most accepted theory of FDI
THIS SET IS OFTEN IN FOLDERS WITH...
IB Chapter 7
IB Chapter 4
IB Final Exam
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