BPC a Flashcards
are trading policies which promotes
benefits of one country at the expense of others.
Beggar-thy-neighbor policies
refers to the relative absence of restrictions to the flow of
goods and services between nations.
Free Trade
is the cost reduction mechanism of a firm. It is
where firm incurs a lower average cost while creating an increasing
number of outputs
Economies of Scale
the belief that national prosperity is the result of a
positive balance of trade, achieved by maximizing exports and
minimizing imports.
Mercantilism
states that a country benefits by
producing primarily those products in which it has an absolute
advantage
Absolute Advantage Principle
asserted by David Ricardo,
this principle contends that what matters is not the absolute cost of
production,
Comparative Advantage Principle
this theory argues that increasing returns to
scale, especially economies of scale, are important for superior
international performance in industries that succeed best as their
production volume increases.
New Trade Theory
refer to the nature of home-market demand
for specific products and services.
Demand Conditions
- refer to the nature of
domestic rivalry and conditions in a nation that determines how
firms are created, organized, and managed.
Firm strategy, structure, and rivalry
- describe the nation’s resources such as labor,
natural resources and advanced factors such as capital,
technology, entrepreneurship, advanced work force skills, and
know-how.
Factor conditions
refer to the presence of
clusters of suppliers, competitors, and skilled workforce.
Related and supporting industries
describe how companies expand
abroad. According to this model, internationalization takes place in incremental
stages over a long period.
Internationalization process model
this theory suggests that firms
that use FDI as an internationalization strategy must own or control
certain resources and capabilities not easily available to
competitors.
Monopolistic Advantage Theory
this theory explains the process by which
firms acquire and retain one or more value-chain activities inside
the firm.
Internalization Theory
as a framework explain the extent and
pattern of the value chain operations that companies should own
Dunning’s Eclectic
