Đề cương KTQT

I. International trade
Introduction:
Definition of international trade:
- In a narrow sense, international trade is the exchange of goods and services
across national borders.
- In a broader sense, international trade is the exchange of goods, services and
resources (capital and labor) across national borders.
Autarky/closed economy:
Trade openess ratio:
-
Gravity model:
International trade theories:
Mercantilism

Absolute advantage theory

- A nation has an absolute advantage in producing a particular good if it can
produce that good more efficiently than the other country.
- More efficient: higher productivity of labor (or lower labor cost)
- When one country has an absolute advantage in the production of a
commodity, but an absolute disadvantage with respect to the other nation in a
second commodity, both nations can gain by specializing in their absolute
advantage well and exchanging part of the output for the commodity of
its absolute disadvantage. ( Khi một quốc gia có lợi thế tuyệt đối trong việc
sản xuất một mặt hàng, nhưng bất lợi tuyệt đối đối với quốc gia kia trong mặt
hàng thứ hai, thì cả hai quốc gia đều có thể đạt được lợi ích bằng cách
chuyên môn hóa tốt lợi thế tuyệt đối của mình và trao đổi một phần sản lượng
để lấy hàng hóa đó bất lợi tuyệt đối của nó.)
  Specialize in producing and exporting goods which a nation has an
absolute advantage and import goods which it has an absolute disadvantage.
-
 Comparative advantage theory: Comparative advantage, OC, PPF, range of price, the
pattern of trade, benefits from trade
- Comparative advantage
 Ricardian model: differences in productivity of L between countries
cause productive differences, leading to gains from trade.
 The Ricardian model uses the concepts of opportunity
cost and comparative advantage.
 The opportunity cost of producing good X is the cost of not being able
to produce good Y because resources have already been used to produce
good X.
 A country has a comparative advantage in producing a good if the
opportunity cost of producing that good is lower in the country than it is in
other countries.
A country with a comparative advantage in producing a good uses its resources most
efficiently when it produces that good compared to producing other goods.

- Opportunity cost
The opportunity cost of a commodity is the amount of a second commodity that must
be given up to release just enough resources to produce one additional unit of the
first commodity.
 Limited resources -> The trade-off
- PPF
PPF is a curve that shows the alternative combinations of the two commodities
that a nation can produce by fully utilizing all of its resources with the best
technology available to it.
- Range of price
- The pattern of trade
A nation should specialize in the production and export
of the commodity that it has comparative advantage and import the commodi
ty that it has comparative disadvantage.
- Benefits from trade
 Factor endownments and the H-O model: factor abundance, factor intensity, PPF, the
pattern of trade, benefits from trade
The basis for trade: comparative advantage
Sources of comparative advantage: Factor endowment (resources that a country
has access to)
A country has a comparative advantage in producing a good
that intensively uses the factor that this country is relatively abundant.
- Factor intensity: the importance of one factor versus others in production in
a good.
- Factor abundance: the availability of a country’s factor of production
 - PPF

- The pattern of trade

H-O theorem: A country will specialize and export the good that is intensive in
the country’s relatively abundant factor and import the good that is intensive in
the country’s relatively scarce factor.
- Benefits from trade

II. International resource movement and multinational corporations

- International investment:
+ Definition: International investment is a cross-border transfer byan investor of tangible
or intangible assets in terms ofcapital, technology, management skills ... to runbusiness so
as to gain high profit on global scale.
+ Types of international investment

 Portfolio Investment
- Financial assets (etc. bonds, stocks)
- Denominated in a national currency
- Not involve in management
- Short-term
 - Take place primarily through financial institutions such as banks and investment
funds.
- Most common type of foreign investments before WW I
 Direct Investment
- Real investments in factories, capital goods, land, and inventories
- Both capital and management are involved
- Investor retains control over use of the invested capital
- Medium or long-term
- Takes the form of a firm starting a subsidiary or taking control of another firm.
- Undertaken by multinational corporations (MNCs) engaged in manufacturing,
resource extraction, or services.

+ Concepts, motivations
+ Benefits of FPI and FDI
+ Horizontal vs. Vertical FDI
- The Basic Difference Between Horizontal and Vertical Integration:
Horizontal integration is an expansion strategy that involves the acquisition of another
company in the same business line. Vertical integration is an expansion strategy where a
company takes control over one or more stages in the production or distribution of its
products. Horizontal FDI refers to the type of direct investment between industrialized
countries as ways to avoid trade barriers,gain better access to the local economy, or draw on
technical expertise in the area by locating near other established firms. Vertical FDI, by
contrast, occurs when a firm in an industrialized country lowers costs by relocating the
production process to low-wage countries.
(Tích hợp theo chiều ngang là một chiến lược mở rộng liên quan đến việc mua lại một công ty khác trong cùng
lĩnh vực kinh doanh. Tích hợp dọc là một chiến lược mở rộng trong đó một công ty nắm quyền kiểm soát một
hoặc nhiều giai đoạn trong quá trình sản xuất hoặc phân phối sản phẩm của mình. FDI theo chiều ngang đề cập
đến loại hình đầu tư trực tiếp giữa các nước công nghiệp hóa như là cách để tránh các rào cản thương mại, tiếp
cận tốt hơn với nền kinh tế địa phương hoặc thu hút chuyên môn kỹ thuật trong khu vực bằng cách đặt gần các
công ty đã thành lập khác. Ngược lại, FDI theo chiều dọc xảy ra khi một công ty ở một nước công nghiệp hóa
giảm chi phí bằng cách chuyển quy trình sản xuất sang các nước có mức lương thấp.)

BASIS FOR HORIZONTAL VERTICAL

COMPARISON INTEGRATION INTEGRATION
Vertical Integration is when a firm
When two firms combine, whose
takes over another firm or firms,
products and production level is
that are at different stage on the
same, then this is known as
same production path.
Horizontal Integration.
Meaning (Hội nhập dọc là khi một công ty
(Khi hai công ty kết hợp với nhau, ai
tiếp quản một công ty hoặc nhiều
sản phẩm và trình độ sản xuất là
công ty khác, đang ở giai đoạn
giống nhau, sau đó điều này được
khác nhau trên cùng một con
gọi là Tích hợp ngang.)
đường sản xuất.)
Capital
requirement (ycau Higher Lower
về vốn)
Self-
sufficiency( tính tự No Yes
túc)
Strategy used to Market Industry
 exercise control
over (chiến lược
kiểm soát)
To avoid tariff barriers, reduce
Goal production costs, gain market
shares, prolong product life cycle
Related to International production
Definition
(Liên quan đến sản xuất quốc tế)
Marriott and Starwood Hotels.
Marriott International (MAR)
acquired Starwood in 2016,
creating the world's largest hotel
company. While Marriott already
had a solid presence in the luxury,
convention, and resort segments,
Starwood's international presence
Examples was very strong. The merger
offered greater choice for
consumers, more opportunities for
employees, and added value for
shareholders. The combined
companies had approximately
5,500 hotels and 1.1 million rooms
worldwide after the merger was
completed.
production specialization on
international scale; each
production stage to be carried out
in certain destinations/countries
with the highest comparative
advantage. (chuyên môn hóa sản
xuất trên quy mô quốc tế; từng
công đoạn sản xuất được thực hiện
tại một số điểm đến/quốc gia có lợi
thế so sánh cao nhất.)
Vertical FDI relates to supply
chains and deepens international
specialization of production (FDI
theo chiều dọc liên quan đến chuỗi
cung ứng và tăng cường chuyên
môn hóa sản xuất quốc tế)
Netflix produces its own content.
Netflix (NFLX) is one of the most
significant examples of vertical
integration in the entertainment
industry. Prior to starting its own
content studio, Netflix was at the
end of the supply chain because it
distributed films and television
shows created by other
companies. But Netflix realized it
could generate more revenue and
be less dependent on others if it
were to create its own
programming. In 2013, the
company released its first original
content in the form of four new
series.

- MNCs
+ Definition
+ Motivatioons
+ Impacts on the host country and home country
Effects of international capital movement on host country

 Effect on Employment of Labour: the host country gains from receiving

foreign investments, these investments lead to a redistribution of domestic income
from capital to labor. If we allow for less than full employment, foreign
investments tend to increase the level of employment in the host country
 Effect on Balance of Payments: The international capital movements affect
the BOP of the investing and host countries. The year in which transfer of capital
 is made, there is an improvement in the BOP for the host country.As regards the
host country, the effect of capital transfer on BOP is positive.
 Effect on Taxes: results from different rates of taxation and foreign earnings
in various countries → the tax base and the amount of taxes collected rise in the
host country
 Effect on Terms of Trade:The capital transfer can affect the terms of trade
through effects on output and the volume of trade. There is a likelihood of terms
of trade turning against the host country.
 Effect on Technological Lead:Prior to the international capital transfer, the
technological gap between the investing and the host countries might be quite
wide. But the transfer of a package of resources including plants and equipment,
spares, technological know-how, scientific management, use of patents and brand
names etc. brings about a narrowing down of the technological lead that the
investing countries earlier had over the host countries.
 Effect on Host Country’s Control over the Economy: The large scale
capital transfers and expansion in the activities of the host countries usually place
some constraints on their ability to conduct and control their own economic
policies.

- International labor movement:

+ Figure illustrate labor movement from one nation to another nation
+ Brain drain

III. International Finance

- BOP
The balance of payments is a summary statement in which, in
principle, all the transactions of the residents of a nation with the
residents of all other nations are recorded during a particular
period of time, usually a calendar year
à A country’s balance of payments accounts keep track of both its
payments to and its receipts from foreigners (including international
trading, borrowings and lending)
(Cán cân thanh toán là một báo cáo tóm tắt, trong đó, về nguyên tắc, tất cả các giao dịch của cư
dân của một quốc gia với cư dân của tất cả các quốc gia khác được ghi lại trong một khoảng
thời gian cụ thể, thường là một năm dương lịch
Tài khoản cán cân thanh toán của một quốc gia theo dõi cả các khoản thanh toán và các khoản
thu từ người nước ngoài (bao gồm cả các khoản thanh toán quốc tế mua bán, vay và cho vay)

- Foreign exchange market and foreign exchange rates

- International monetary system: Exchange rate regime, fixed, freely floating ex
rate regime