Theories of International Trade and Investment
National industrial policy
→ -:- A proactive economic development plan a government initiates to build or
strengthen a particular industry.
Mercantilism
→ -:- The belief that national prosperity is the result of a positive balance of trade,
...
Best Grades | Must Pass | Latest Update | Correct Answers | 2024/2025
Bellner BUSMHR 2000 Exam 2 (Final)
Questions and Correct Answers | Latest
Update
Theories of International Trade and Investment
National industrial policy
→ -:- A proactive economic development plan a government initiates to build or
strengthen a particular industry.
Mercantilism
→ -:- The belief that national prosperity is the result of a positive balance of trade,
achieved by maximizing exports and minimizing imports.
Internalization theory
→ -:- 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
→ -:- 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
→ -:- Relative absence of restrictions to the flow of goods and services between nations.
Competitive advantage
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, Best Grades | Must Pass | Latest Update | Correct Answers | 2024/2025
→ -:- 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
→ -:- 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
→ -:- 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
→ -:- The idea that a country benefits by producing only those products it can produce
using fewer resources.
National Classical Theories
→ -:- -Mercantilism
-Absolute Advantage Principle
-Comparative Advantage Principle
-Factor Proportions Theory
-International Product Life Cycle Theory
-New Trade Theory
National Contemporary Theories
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