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Internation Trade

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Submitted By nguyenhoangka
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A-International Trade theory

1-Mercantilism
Thomas Mun (17th century) stated that foreign trade was only beneficial if a country “sells more to strangers yearly than we consume of theirs in value”
2-Absolute advantage (1776, Adam Smith)
The ability of a country to produce a product with fewer inputs than another country
3-Comparative advantage (1817, David Ricardo)
The notion that although a country may produce both products more cheaply than another country, it is relatively better at producing one product than the other
4-Product life cycle theory
A product life cycle refers to the time period between the launch of a product into the market till it is finally withdrawn from it. In a nut shell, product life cycle or PLC is an odyssey from new and innovative to old and outdated! This cycle is split into four different stages which encompass the product's journey from its entry to exit from the market.
This theory suggest that products pass through a four-stage cycle: 1- Introduction 2- Growth 3- Maturity 4- Decline

5-New trade theory
Free trade implies specialization and requires that nations neither artificially limit imports nor artificially promote exports.
It suggested that it might benefit countries with an advantage in producing certain goods to initially protect the trade of such goods. By doing so, the economic advantage for the producing company might be more greatly realized, especially in the future.

6-Porter’s determinants of national competitive advantage
Michael Porter identified four determinants of national competitive advantage (Porter 1992)

1- Factor Conditions
The situation in a country regarding production factors, like skilled labor, infrastructure, etc., which are relevant for competition in particular industries. 2- Demand Conditions
A national’s competitive advantage is increased if there

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