T

x Theories

Mercantilism

Traditional

Liberalism

Absolute advantage

Competitive advantage

Factor endowments

Contemporary

Economies of scale
Tecnology and product cycle

Leontiff`s Research
 Theories of International Trade
Concept

Is a economic Theory were the goverment

seeks to economy and trade in order to promote
domestic industry.Is associated with policies
which restrict imports, increase stock of gold
and protect domestic industries.

Is the removal or reduction of restrictions or

barriers on the free exchange of goods between
nations.

Is the ability of a country or producer to

produce more of a good or service with fewer
resources or at a lower cost compared to other.

Refers to factors that allow a company to

produce goods or services better or more
cheapply than its rivals.

Factor endowments are the resources a country

can use for economic activity, such as land,
minerals, capital and labor.

When production becames efficient.

Companies can achieve economies of scale by
increasing production and lowering costs. This
happers because costs spread over a larger
number of goods. Costs can be both fixed and
variable.
 That tenm refers to the length of time from
when a product is introduced to cosumers into
the market until its removed from the shelves.

Wassily Leontief was a Russian-American

economist who made several contributions to
the world of economics.
Theories of International Trade
Characteristics

• Restrictioons on imports.
• Granting of state monopolies.
• Subsidies of export industries.
• Accumulation of foreing currency reserves.
• Allows the copyright from foreing companies.

• Trade liberalization reduces consumer costs increases efficiency and

promotes economic growth.
• It allows countries to trade goods without regulatory barriers or their
associated costs.
• Greater external competition creates an incentives for greater
efficiency and cheaper production by domestic companies.

• Efficiency in production.
• Greater quantily or lower cost.
• Specialization and trade.
• Benefits of international trade.

• Broken down into.

• Comparative advantages.
• Differencial advantages.
• Generate greater value.
• Costs.
• Differentiation.
• Specialization.

• Diversity and quantity

• Comparative advantage
• Change over time

• Migmer production and lower costs: As a company produces

more, it can spread production costs over a greater number of goods,
resulting in lower unit costs.
• Internal and external: Internal are caused by factors within a
single company while externaln factors affect the entire industry.

• Limits: There are limits to economies of scale, and a company can

experience "diseconomies" of scale if it becomes too large and loses
efficiency.
• Introduction Stage.
• Growth Stage.
• Maturity Stage.
• Decline Stage.
· He established one of the first economic sector classification
·systems.
He developed input-output tables for sector analysis that estimated
the impact a change in production of a good has on other industries and
·theirInput-output tables can produce very rough estimates for small or
inputs discovered
·moderate
Leontief that the U.S., a country with a great deal of
changes in outputs.
capital, was importing capital-intensive commodities and exporting
labor-intensive commodities.
· The Composite Commodity Theorem was a third major development
credited to Leontief. This states that if the relative prices of a basket of
goods are assumed to be fixed.
 Relation with Supply Chain Management

Mercantilism withim supply chains advacates the development and

enrichment of the state traugh foreing trade.

Trade liberalization tends to facilitate the management of global supply

chains, while new mercatilism can intruduce additional challenges and
risks in the management of these chains.

• Suppplier selection: Companies consider sourcing products from

countries or suppliiers that can produce a specific iten more efficiently.

• International trade: Enables companies and countries to specialize

in what they do best and the exchange those products in the global
market.
• Inventory management: Enables companies to maintain an
apropricate inventory of products that are produced internally efficiently

The theory of competitive advantage relates to supply chain management

by focusing on optimization, differentiation, and risk management. By
applying principles of competitive advantage in supply chain
management, companies can better position themselves in the market and
achieve greater success.

Factor endowments are crucial in determining a countrys ability to

participate in different stages of a global supply chain.

Economies of Scale play an important role. When a company achieves

economies of scale, it can purchase input in bulk from its suppliers,
reducing prowrement costs
The Supply Chain is a means of distribution whose function is to obtain
materials in intermediate products, finished products and distribute these
finished products to consumers.

In relation to the supply chain, Leontief theory suggests that companies

and countries specialize in areas where they have comparative
advantages, that is, where they can produce goods more efficiently and
profitably. This implies that companies may choose to outsource certain
stages of their supply chain, such as component manufacturing or
logistics, to other countries or companies that can produce them more
efficiently.