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MAN010 - MODULE 3 - PPT - 1 - Trading Internationally - Trade Theories1
MAN010 - MODULE 3 - PPT - 1 - Trading Internationally - Trade Theories1
Module 3
Trading Internationally
2-2
Opening Case: Why Are German Exports
So Competitive?
2-3
Opening Case: Why Are German Exports
So Competitive?
2-4
Opening Case: Why Are German Exports
So Competitive?
2-6
WTO Trade Report as of 2019
2-7
Pattern of Trade (Export)
U.S. exports vehicles - new and used cars (12.1% as of
2019)
Ghana exports cocoa
Brazil exports coffee
Saudi Arabia exports oil
China exports electrical machinery, crawfish
Japan export automobiles, consumer electronics, and
machine tools
Switzerland export chemicals, pharmaceuticals,
watches, and jewelry
Bangladesh export garments
South Korea – consumer technology
2-8
Economy of the Philippines
Comprises of more than 7,641islands
(www.gov.ph), The vast majority of the
population lives on only 11 of them.
https://commodity.com/data/philippines/#Top_5_Commodity_Exports
2-10
WHY DO NATIONS TRADE?
2-11
WHY DO NATIONS TRADE?
2-12
WHY DO NATIONS TRADE
2-13
THEORIES OF INTERNATIONAL TRADE
2-14
THEORIES OF INTERNATIONAL TRADE
2-15
Theory of Mercantilism
2-18
Absolute Advantage
2-20
Theory of Absolute Advantage
2-22
Theory of Comparative Advantage
Comparative advantage is
defined as the relative (not
absolute) advantage in one
economic activity that one nation
enjoys in comparison with other
nations.
2-23
Comparative Advantage
Bangladesh
Export Textile industry
Walmart
Labor cost – 50%
¾ of inputs are locally produced
West are cautious about not
becoming too dependent on
China.
2-24
Product Life Cycle
2-25
Strategic Trade
2-27
National Competitive Advantage of
Industries
Factor endowments(Heckscher-Ohlin
Theory) - a nation’s position in factors of
production such as skilled labor or the
infrastructure necessary to compete in a
given industry
Demand conditions - the nature of home
demand for the industry’s product or
service.
2-28
National Competitive Advantage of
Industries
2-29