...Porter’s Diamond Framework a new theory that explains the international competitiveness of countries? A.J. Smit ABSTRACT The focus of this article is to clarify the meaning of international competitiveness at the country level within in the context of Porter’s (1990a) thesis that countries, like companies, compete in international markets for their fair share of the world markets. At a country level, there are two schools of thought on country competitiveness: the economic school, which rejects Porter’s notion of country competitiveness, and the management school, which supports the notion of competitiveness at a country level. This article reviews and contrasts the theories pertaining to these two schools of thought with specific reference to trade theories and the ‘theory’ of the competitive advantage of nations originally advanced by Porter (1990a, 1997a, 1998b, 1998c, 2000). Although Porter’s Diamond Framework has been extensively discussed in the management literature, its actual contribution to the body of knowledge in the economic and management literature has never been clarified. The purpose of this article is to explain why Porter’s Diamond Framework is not a new theory that explains the competitiveness of countries but rather a framework that enhances our understanding of the international competitiveness of firms. Key words: Porter, Diamond Framework, international competition, competitiveness of countries, international business, national competitive advantage, country sources...
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...Assignment 4.2/International Business 10/20/13 National American University Heather Morris The impact of globalization on labor markets has re-emerged as an important policy issue, reflecting the broader public debate about the interrelated concerns of downward pressure on wages, increased job insecurity, and jobs moving from OECD countries to developing countries with lower wages. Two relatively recent phenomena are at play here. One is the accelerating participation in world trade of many developing and transition countries, particularly the large, vastly populated economies of China and India. These countries’ increased trade and foreign direct investment have, according to some estimates, contributed to a fourfold rise in the effective global labor force over the past two decades. The second phenomenon is that the nature of globalization is changing. Technological advances, and particularly sharp reductions in communication and coordination costs, have allowed the emergence of global supply chains that are increasingly fragmented geographically. To feed these supply chains, international trade is Increasingly in intermediate inputs rather than in final goods and services or commodities. Moreover, often these intermediate inputs are business services that were previously nontradable but are now, with technological advances, tradable. This type of international trade, whether in services or other intermediate inputs, is referred to as offshoring. Here...
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...against the Euro. 2)a) Examine the effect of the Common Agricultural Policy on the world trade in agricultural goods. b) Evaluate the implications of a significant reduction in barriers to the trade and services for the global economy. 3)a) In 2002 the unemployment rates in Spain, France and Italy were significantly higher than in the UK. Examine the factors which might explain why the UK's unemployment rate was lower in these countries. b) To what extent might the pursuit of full employment conflict with other macroeconomic objectives? ------------------------------------------------- Exemplar: 1)a) 'The competitiveness of the Uk's manufacturing sector has declined in recent years'. Discuss the factors which may have affected the international competitiveness of UK goods. b) Evaluate the methods by which the UK's international competitiveness could be increased. 2)'Trading blocs are becoming increasingly important to the world economy' a) Discuss the benefits to a country belonging to a trading bloc. b) To what extent might the policies of the WTO conflict to those of trading blocs? ------------------------------------------------- June 02 1a) Examine the factors which have led to an increase in interdependence between countries in the world economy. b) Assess the impact on the global economy of the continued use by trading blocs of measures which restrict free trade. 2a) Examine the impact of falling oil prices on the economies of the European Union...
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...INTERNATIONAL ENTRY AND COUNTRY ANALYSIS A Lecture Programme delivered at the Technical University of Košice Andrew Harrison Formerly of Teesside University, United Kingdom December 20112 Andrew Harrison’s Brief Biography Andrew Harrison was a Principal Lecturer and Subject Group Leader in economics at Teesside University until August 2010 and has been a visiting lecturer at the Technical University of Košice since April 1993. He has also been a visiting lecturer in Germany, Ukraine and Singapore. Since leaving the full-time staff of Teesside University, he has continued to work as an occasional lecturer and as an external examiner at two other UK universities. He holds qualifications from London, Salford and Leeds Universities and Trinity College of Music, London. In April 2008, he was awarded the degree of Doctor Honoris Causa by the Technical University of Košice. He is married to Heather and has two grown-up children, David and Rachel. In his spare time he is a keen amateur pianist and organist. Brief Course Description International business activity is one of the key features of the contemporary global economy. The decision to venture abroad involves the evaluation of alternative entry modes, bearing in mind the degree of risk and the suitability of the business environment in a potential host country or region. Political, economic, cultural and other factors are all of vital importance. This short course aims to explore these issues in the light of current research and...
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...Customer value d. None 6. CAT stands for _______________ 7. Cave dwellers are______________ 8. LIFO stands for life in fire option.(T/F) 9. Starbursts are _______________ 10. _____________is an advantage over competitors gained by offering consumers greater value Part Two: 1. What are the implications of tariffs in the Global Marketing? 2. Write a short note on “Diffusion Theory”. IIBM Institute of Business Management Examination Paper of International Business Management 3. Discuss the concept of competitive marketing strategies. 4. Discuss the importance of marketing mix. END OF SECTION A Section B: Caselets (40 marks) This section consists of Caselets. Answer all the questions. Each caselet carries 20 marks. Detailed information should form the part of your answer (Word limit 200 to 250 words). Caselet 1 The competitive advantage of nations and the competitiveness of locations have become important topics in economic policy. Competitiveness is...
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...The UK Economy and Globalisation WHY COUNTRIES TRADE GLOBALISATION Globalisation | Expansion of world trade in goods and services leading to greater international interdependence | Globalisation usually leads to: * An increase in outsourcing * Large sums of money being transferred from country to country for financing When did Globalisation First Start? There are three major stages of globalisation: Stage | When? | What? | 1 | 1870Increase in international trade | * New technology helped improve transport * Reduced cost of moving goods between countriesEnded in 1920s as countries tried to protect home industries against foreign competition so reduced imports. | 2 | 1945 End of Second World War | * Countries keen to rebuilt economies * Led to rapid expansion in world trade * International Monetary Fund and World Bank founded * Promoted trade and economic cooperation | 3 | Now | * Increase in trade and capital flows between countries * Growth of huge companies | Factors Contributing to Globalisation Improvements in transportation | Cost of transporting goods decreased (eg: due to containerisation) meaning goods can be traded competitively worldwide | Improvements to ICT | Communications are much faster and cheaper – payments can be sent between countries immediately at a low cost. Promotion of products via the internet to a worldwide market also increases world trade. | Rising real living standards | Increase in consumer...
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...Title page International trade, technology transfer and firm competitiveness: A comparative study of Zimbabwe exporting and non-exporting firms. By Michael Kamoyo Chinhoyi University of Technology Lecturer: Department of Marketing mkamoyo@cut.ac.zw ; rumbi12@yahoo.co.uk Tel: 263 67 29442 Abstract better positioned to adopt and assimilate international trade related technology because they possess better technological capabilities in the form of The paper examines the preparedness of exporting and non-exporting SMEs in harnessing the technological opportunities availed by international trade. Using cross sectional data for 131 SMEs, a logistic regression analysis was done to ascertain the extent to which factors like, technical skills, networking, firm’s innovation system, especially research and development activities and international involvement influence the adaptation and assimilation of technology for productive efficiency. The result shows that labour used in exporting firms is 3.164 times more productivity than that in non-exporting firms, high import composition, good networking abilities. However, it was noted that there is no significant difference between exporting and non-exporting firms on Information Communication Technology (ICT) diffusion and R&D activities. It is recommended that for technology transfer to be relevant and useful to non-exporting firms there is need to strengthen their technological absorptive capacity by scaling up their networking...
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...present circumstances, those of recession. Initially, we define the comparative advantage based on the approaches of Adam Smith, David Ricardo's and Heckscher-Ohlin. Furthermore we analyze the current situation of the country, Greece’s economic structure and its trade performance, mainly the exports. In addition we identify the elements of the Greek competitiveness and the results of the fiscal consolidation that Greece is undergoing. Having analyzed the definition of the comparative advantage and the data concerning Greece’s reforms we proceed in identifying Greece’s comparative advantage mainly in four different sectors. Firstly we identify the key factors making the touristic sector extremely profitable for the Greek economy; secondly we analyze the commercial shipping sector then the strategically position of the country and finally the competitive rates in which Greece seems to gain ground. Keywords: comparative advantage, competitiveness, internationalisation, entrepreneurship, financial crisis. 1 Contents: 1. Historical and literature review. 2. Greece – Country Analysis: Reforms and fiscal consolidation. 2.1: Economic Structure and Performance of Greece. 2.2: Elements of Greek Competitiveness. 2.3: Fiscal Consolidation and its results. 2.3.1: GDP growth rate & Consumer Price Index. 2.3.2: Strong austerity measures and their results. 2.3.3: Driving down the deficit – Rebounding Greece 3....
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...BELARUS AND KAZAKHSTAN AS THE STEP TOWARDS THIS “DREAM” EXECUTIVE SUMMARY WORLD TRADE ORGANIZATION We live in the twentieth century – a time of dynamic changes in the Global Economy, associated with globalization. In International Trade Arena, the vast majority of the countries choose the free trade policy, which develops step by step: from Free Trade Area, a Custom Union into Common Market and Monetary and Economic Union. Politicians and scientists believe that in 20-30 years Trade World will be subdivided into 2-3 intercontinental preferential zones with its own rules and free trade between the parties, but with external custom barriers in relation to other blocks or still will open the ways for mixing of regionalism and multilateralism based on common objectives and principles. Obviously, the development of the World economy and trade will lead to the formation of a single Global Free Market with the agreed rules and disciplines, which will be applicable to all countries. The dominant position is such a direction takes the World Trade Organization (WTO). It was established on December 8, 1994 and began operating on 1 January, 1995 and is known to be a successor of the General Agreement on Tariffs and Trade (GATT). Here, a distinctive feature and the goal of WTO is the creation of international trade rules and disciplinary measures to ensure the conditions of a free international trade, based on mutually beneficial conditions, openness and equality of members. If after...
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...WTO Forum OPPORTUNITIES AND CHALLENGES FOR VIETNAM IN WTO ACCESSION Prof. Dr. Do Hoai Nam Director, National Center for Social Science & Humanity It is imperative to explain the opportunities and challenges faced by Vietnam in its WTO accession. In principle, opportunities and challenges in integration for Vietnam now are affected by two major factors. The first is the complex and fast changing international context. The second is Vietnam's specific issues in its own development. To come up with an appropriate approach, the study on opportunities and challenges for Vietnam in WTO accession should clarify these factors. 1. New international context, opportunities and challenges in development for Vietnam In recent period, the world situation changed rapidly and profoundly as never before. The impact of globalization and the knowledge-based economy forces developing countries to join the world economy system, and the situation for them is much more difficult than before. In general, the level of development in the modern world is measured by the following indicators: First, high speed of change and the faster pace of shortening in the production and technology cycle. Second, the global network structure and the complex nexus of the world economy. Third, conditions for economic development become unstable and unpredictable. Fourth, the balance of power is profoundly changing and driving the world economy, with power concentrating in a few nations and transnational corporations...
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...Foreign Trade and Exchange International trade exists due to things produced in a particular country that individuals, firms and governments in foreign countries want to purchase. Trade provides a greater selection of goods and services to choose from, often at lower costs than at home. In order to prosper and profit, countries want to use their resources such as labour, land and capital, as efficiently as possible. However, the quantity, quality and cost of resources can differ substantially between countries. Some have natural advantages, such as ample minerals or a climate suited to agriculture. Others have a well-trained workforce or highly developed infrastructure, advanced telecommunications systems and reliable electric utilities, which benefit the production and distribution of goods and services. Canada, as an example, depends heavily on trade to sustain incomes and living standards of Canadians and the prosperity of the nation. Other than trying to produce everything domestically, which would be inefficient, countries often concentrate on producing those things that they can produce best, and then trade for other goods and services. By doing so, both the country and the world become wealthier. Today, most industrialized nations could produce almost any product they chose. However, this does not make good economic sense. Much of the labour, land and capital that would have to be directed toward the production of a new item unfamiliar to that nation could be used more...
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...Mexican Exterior Commerce Law Foreign trade is a term that can be explained as the number of imports and exports from one place to another that affect the trade balance “Foreign trade is that part of the external sector of the economy that regulates the exchange of goods and products between suppliers and consumers residing in two or more customs territories and / or other countries whose operations were statistically trade balance” This law is to regulate and promote foreign trade, increase competitiveness of foreign trade, increase competitiveness of the national economy, promote the use of the national economy, promote the efficient use of productive resources of the country, resource efficient productive country, properly integrate the Mexican economy to international and contribute to raising the welfare of the population. The goal is to help producers of goods and services, exporters, and importers conduct their business through the establishment of rules and dispute settlement Set of legal systems, national order and international character, governing the relationships necessary on this matter between public bodies between belonging to different states and individuals who perform acts listed in Foreign Trade. Fundamental objective is to regulate the output entraday goods to / from national territory on fiscal and administrative procedures. Study, plan and propose to the Federal Executive tariff changes. regulatory measures and non-tariff restrictions on the export...
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...Critically evaluate Porter’s Diamond of National Competitive Advantage as an aid to understanding national competitiveness. Table of Contents Table of Contents 2 1. The diamond model by Michael Porter 3 1.1 Introduction 3 1.2 Diamond model Theory 4 1.2.1 Factor Condition 4 1.2.2 Demand conditions 5 1.2.3 Firm strategy, structure and rivalry 5 1.2.4 Related and supported industries 6 1.2.5 The role of Government 6 1.3 Criticism of the framework 7 1.4 Practical Example 7 1.5 Conclusion 8 1 2 3 4 5 6 7 8 9 1. The diamond model by Michael Porter 1 1.1 Introduction According to Recklies (2001), increasingly corporate strategies have to be seen in global context and even if an organization does not plan to import or to export has to look at an international business environment, in which actions of competitors, buyers, sellers, new entrants of providers of substitutes may influence the domestic market and information technology has been reinforcing this trend. The classical models and theories related to international trade before Michael Porter’s Diamond theory, mainly proposed that the comparative advantage resides in the factors endowments that a country may be fortunate enough to inherit and these factors mainly consisted of land, natural resources, labour and the size of the local population but Porter argued though his...
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...situation has divided opinion on the use of trade protectionism.’ Discuss. ECONOMIC CRISIS AND PROTECTIONISM: A DISCUSSION Introduction First and foremost to logically explore the question at hand, the meaning of trade protectionism must be fully comprehended, according to Amadeo (2012) “Trade protectionism is used by countries when they think their industries are being damaged by unfair competition by other countries” The fundamental commotion of the pre-Great Recession on the economic order that was based on the assumption of inherent value of unlimited trade and capital flows has led to the new emergence of debate on trade protectionism as the means of combating the present crisis. In particular, the European Union (EU) nations have seen increasing calls for the implementation of the more protectionist economic policies. However, given the integrated and interconnected nature of both modern and specific national economies, one may note that protectionist policies would be more likely to hurt economic recovery and contribute to the sharpening of international trade contradictions. This paper presents an account of both parties’ argument, with the recourse to respective quantitative data, in order to substantiate the claim on infeasibility of treating protectionism as a cure for global and European economies’ maladies. The Impact of Protectionism on Crisis and Post-Crisis Developments According to Henn & McDonald (2011), trade protectionist measures implemented by certain...
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...CAMPUS ABROAD 2012 Management of international Organizations and NGOs Greta Nasi Bocconi University p. 1 The agenda of the i-cities block International cities Creating value and competitiveness for international cities NYC case ICT and connectivity Greta Nasi Bocconi University p. 2 An urban world Globalization and the knowledge economy have repositioned cities as drivers of national economies 2025: 75% of the world population will live in cities 2025: 17 of the world’s 25 largest cities will be in coastal regions in Asia 1925:25% of the world population will live in cities Greta Nasi Bocconi University p. 3 Global economy and international cities World is changing fast. Different trends are affecting cities and fostering a new age of urbanizations and metropolitanization To succeed cities must adjust (and need to be): open, integrated, diverse, connected, skilful, innovative, investable, attractive, sustainable, stable and safe This requires investments, strong coordination of programs and policies, effective tools for intervention: cities need partnerships with global corporations and small businesses to achieve this in order to create opportunities for business growth Greta Nasi Bocconi University p. 4 What are international cities? A close look An international city is a city deemed to be an important node point in the global economic system. They are also known as global cities, world cities or alpha cities...
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