CH 5 - answer-Theories of International Trade and Investment
National industrial policy - answer-A proactive economic development plan a government initiates to build or strengthen a particular industry.
Mercantilism - answer-The belief that national prosperity is the result of a positive bal...
Bellner BUSMHR 2000 Final Exam 2
CH 5 - answer-✔Theories of International Trade and Investment
National industrial policy - answer-✔A proactive economic development plan a
government initiates to build or strengthen a particular industry.
Mercantilism - answer-✔The belief that national prosperity is the result of a
positive balance of trade, achieved by maximizing exports and minimizing
imports.
Internalization theory - answer-✔An explanation of the process by which firms
acquire and retain one or more value-chain activities inside the firm, minimizing
the disadvantages of dealing with external partners and allowing for greater control
over foreign operations.
Industrial cluster - answer-✔A concentration of businesses, suppliers, and
supporting firms in the same industry at a particular location, characterized by a
critical mass of human talent, capital, or other factor endowments.
Free Trade - answer-✔Relative absence of restrictions to the flow of goods and
services between nations.
Competitive advantage - answer-✔Assets or capabilities of a firm that are difficult
for competitors to imitate. They are typically derived from specific knowledge,
competencies, skills, or superior strategies.
ex: knowledge, capabilities, skills, strategies, networks, assets
, Comparative advantage principle - answer-✔It may be beneficial for two countries
to trade with each other as long as one is relatively more efficient at producing a
product needed by the other.
Comparative advantage - answer-✔Superior features of a country that provide
unique benefits in global competition, typically derived from either natural
endowments or deliberate national policies.
ex: resources, land, location, climate, labor (low cost & skilled)
Absolute advantage principle - answer-✔The idea that a country benefits by
producing only those products it can produce using fewer resources.
National Classical Theories - answer-✔-Mercantilism
-Absolute Advantage Principle
-Comparative Advantage Principle
-Factor Proportions Theory
-International Product Life Cycle Theory
-New Trade Theory
National Contemporary Theories - answer-✔-Competitive Advantage of Nations
-Michael Porter's Diamond Model
-National Industrial Policy
Firm Internationalization - answer-✔-Internationalization Process of the Firm
-Born Globals and International Entrepreneurship
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