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Supporting Theory

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Supporting Theory and Models of Success As the most successful investor of the 20th century, Warren Buffett is noted for his adherence to value investing. His theory known as “Buffett theory” can be applied here. “Buffett theory” indicates that you would earn money if you invest in other people have invested (120-121). On other words, it has a greater probability to get a profitable return if investing in something which has potential and undiscovered value. Another theory is also helpful in another way. According to "The "Dualistic Theory" of Underdeveloped Areas", “capital flows to places with low transaction costs” like water flows downwards (Benjamin 235). Underdeveloped areas always have a low transaction cost, which means capital is prone to flow in. Although these two theories have different authors they show the similar point clearly that those underdeveloped areas which have undiscovered value can be worthy to invest and have a bigger possibility to get a profitable return compared to mature market. Besides, another famous theory, which Daniel gives it a good explanation in the book "The Matthew Effect in The Economy" can be applied. Matthew Effect in economy is the phenomenon where “the rich get richer and the poor get poorer” originally (Daniel, 143). It may refer to cumulative advantage of economic capital literally. Back to the underdeveloped area which has undiscovered value, once it gets large investment at first, it will generate a cumulative advantage that other areas cannot compete. It will eventually result in a phenomenon called “monopoly” (William 231). At last, it will grow into a mature market which has a fat economic return.

Business Center in Wenzhou University Town, China

Some programs have adopted the above theories and gain success. One of the good examples is Business Center in Wenzhou University Town. Wenzhou university town

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