International Trade and Development

In: Business and Management

Submitted By vjtwci
Words 2414
Pages 10
Question 1: “You can’t tell consumers that the low price they are paying on that fax machine is somehow unfair. They’re not concerned with the profits of some company. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement? Do you think that people from different cultures would respond differently to this statement? Explain your answers. 2

Question 3: “Companies should use investment entry modes whenever possible because they offer the greatest control over business operation.” Do you agree or disagree with this statement? Are there times when other types of market entry offer greater control? When is investment entry a poor option? 4

Question 4: Identify the three business level strategies. Describe how they differ from one another. 6

Cost leadership strategy 6

Segmentation Strategy 6

Differentiation Strategy 7

Question 5: Some people believe the rise of regional trading blocs threatens free trade progress made by the WTO. Do you agree? Why or why not? 9

References 10

Question 1: “You can’t tell consumers that the low price they are paying on that fax machine is somehow unfair. They’re not concerned with the profits of some company. To them, it’s just a great bargain and they want it to continue.” Do you agree with this statement? Do you think that people from different cultures would respond differently to this statement? Explain your answers.

I agree with the statement “You can’t tell consumers that the low price they are paying on that fax machine is somehow unfair. They’re not concerned with the profits of some company. To them, it’s just a great bargain and they want it to continue.” There are various reasons for such a scenario to take place. One of the main reasons is dumping. Dumping can be classified into 2 types. The first type is when a foreign firm is trying…...

Similar Documents

International Trade

...International Trade Simulation The term international trade is defined as the economic interaction among different nations involving the exchange of exports and imports. The main principle of international trade is comparative advantage, which indicates that every country, no matter their level of development, can find something that it can produce cheaper than another country. The purpose of the International Trade Simulation is to show how countries interact with one another when exporting and importing. International trade depends on nations working together, while looking out for their own personal interests. When I began the International Trade Simulation my strategy was to acquire as much wealth as I could for my nation, South America. As the game progressed I began to switch strategies and began to acquire as many different goods as I could for my nation, so that I could offer the people of my nation an array of goods. The global economy at the beginning of my game was horrible and did not proceed to get much better as the game went on. Even though the global economy was bad I was still able to achieve my first goal of acquiring as much wealth as I could. I did this by exporting my goods at top dollar. I found that some countries would buy what I was exporting no matter what price I would ask for even though the global economy was poor, especially when I was exporting crude oil. This made sense to me because most countries depend of crude oil for......

Words: 560 - Pages: 3

International Trade

...The Heckscher-Ohlin theory explains why countries trade goods and services with each other. One condition for trade between two countries is that the countries differ with respect to the availability of the factors of production. They differ if one country, for example, has many machines (capital) but few workers, while another country has a lot of workers but few machines. According to the Heckscher-Ohlin theory, a country specializes in the production of goods that it is particularly suited to produce. Countries in which capital is abundant and workers are few, therefore, specialize in production of goods that, in particular, require capital. Specialization in production and trade between countries generates, according to this theory, a higher standard-of-living for the countries involved. New notes The Heckscher Ohlin model Introduction The Heckscher Ohlin model Predicts that different factor endowments between countries is a key issue in the international trade flows but others such a WW Leontief, who in 1954 tried o test the theory empirically, found that this model failed to explain United States trading patterns. Read more: The Heckscher Ohlin assumption The Heckscher Ohlin theory explains why countries trade good and services to each other. To apply this theory countries have to respect conditions; one of those is that the countries obviously differ with respect to the......

Words: 2387 - Pages: 10

Trade Barriers to International Trade

...WHAT IS GLOBAL/INTERNATIONAL TRADE? Global trade is the exchange of capital, goods, and services across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP). While international trade has been present throughout much of history (see Silk Road, Amber Road), it’s economic, social, and political importance has been on the rise in recent centuries. Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trade system. Increasing international trade is crucial to the continuance of globalization. Without international trade, nations would be limited to the goods and services produced within their own borders. International trade is, in principle, not different from domestic trade as the motivation and the behavior of parties involved in a trade do not change fundamentally regardless of whether trade is across a border or not. The main difference is that international trade is typically more costly than domestic trade. The reason is that a border typically imposes additional costs such as tariffs, time costs due to border delays and costs associated with country differences such as language, the legal system or culture. Another difference between domestic and international trade is that factors of production such as capital and labor are typically more mobile within a country than across......

Words: 7774 - Pages: 32

International Trade

...Module Code: EO314 Module Title: ISSUES IN INTERNATIONAL ECONOMICS Module Convenor: Stephen Smith ID: 03004367 Topic: INTERNATIONAL TRADE This project will attempt to research and gain an understating of whether there is linkage between trade liberalisation and poverty in (SSA) sub Saharan Africa. The project will contain a balance of key analytical approaches and empirical evidence on trade liberalisation and economic growth. In the world of economics and politics, trade and poverty is one of the major issues which has been debated over last decade. On the international stage, there is a growing concern among super powers, African leaders, and other observers that the independence and credibility of the state continues to be endangered due to the negative balance of trade, heavy dependence on international aid and the high levels of indebtedness in Sub Saharan Africa. The debt relief has come to be viewed not only as a basic condition for arresting Africa’s socio-economic decline but also for stimulating and sustaining development. Consequently, debt has had an adverse impact on the majority of the population, poverty, unemployment and socio-economic, inequalities has increased, physical infrastructures has deteriorated, political and civil conflicts have worsened and corruption has become more persistent. The concern with how to tackle the debt crisis has led to a number of developments, however the main one is for the G-8 countries to have......

Words: 3689 - Pages: 15

International Trade

...customer’s duty? a. Section 47 b. Section 88 c. Section 74 d. Section 40 Risks arising out of foreign law due to________________. a. Lack of knowledge about foreign market b. Expensive and complex litigation c Both ‘a’ & ‘b’ d. None of the above Import LC is also known as ______________________. a. Letter of Debt b. Bills of exchange c. Open account d. Letter of credit How much digits are there in IEC number? a. 8 b. 10 c. 12 d. 15 What is the full form of RFID? a. Rural Fund Information Development b. Request For International Development c. Radio Frequency Identification System d. Radio Frequency Internal System The Export Inspection Council is a _____________________. a. Support the export corporation b. Responsible for the enforcement of QC c. Administrative control of the ministry of Commerce & industry d. Provides consultancy to export organization 2. 3. 4. 5. 6. 1 IIBM Institute Of Business Management Examination Paper: Export and Import Management 7. The World Trade Organization was formed in_________________. a. 1994 b. 1995 c. 1996 d. 1997 Government policies are related to__________________________. a. Income tax b. Sales tax c. Both ‘a’ & ‘b’ d. None of the above Clearing and forwarding agents are an important link between_______________. a. The exporter and various other agencies b. The importer and various other agencies c. Import and export of goods d. All of the above 8. 9. 10. Which Regional issues are important to......

Words: 3217 - Pages: 13

International Trade

...SATAKUNNAN AMMATTIKORKEAKOULU SATAKUNTA UNIVERSITY OF APPLIED SCIENCES Anna Tulinen FACING THE CHALLENGES IN EXPORTING TO RUSSIA SCHOOL OF BUSINESS RAUMA Degree Programme in International Business and Marketing Logistics 2007 TIIVISTELMÄ VENÄJÄN VIENNIN HAASTEIDEN KOHTAAMINEN Tulinen, Anna Satakunnan ammattikorkeakoulu International Business and Marketing Logistics Liiketalouden Rauman yksikkö Tammikuu 2007 Tanhua, Daniela Sivumäärä: 85 Avainsanat: kansainvälinen kauppa, vienti, Venäjä Opinnäytetyön aiheena on Venäjän viennin ongelmien tutkiminen. Työ pitää sisällään teoreettisen osuuden, jonka pohjalta empiirinen tutkimus on tehty. Tarkoituksena oli selvittää minkälaisia ongelmia pienet ja keskisuuret suomalaiset yritykset kohtaavat viedessään tuotteitaan Venäjälle. Venäjän WTO-jäsenyysneuvottelut ovat loppuvaiheessaan ja työn tarkoituksena on myös eritellä niitä etuja, joita tuo jäsenyys saattaa tuoda mukanaan Venäjän kauppaa käyville yrityksille. Teoreettinen osuus kuvailee kansainvälistä kauppaa ja vientiä. Osassa, joka käsittelee kansainvälistä kauppaa, kuvaillaan lyhyesti kansainvälistä markkinointi ympäristöä sekä luetellaan kansainvälisen kaupan esteet ja ne syyt, joiden mukaan valtiot pyrkivät estämään kansainvälistä kauppaa. Kappaleen loppu keskittyy käsittelemään logistiikan tärkeyttä ja ongelmia kansainvälisessä kaupassa. Viennin osuudessa käsitellään viennin peruskäsitteitä sekä kansainvälisen kaupan dokumentaatiota ja tullin roolia. Viitekehys......

Words: 25512 - Pages: 103

The Importance of the International Trade for China’s Development

...importance of the international trade for China’s development With the development of the technology and the cooperation among the varieties countries,international trade is playing a irreplaceable role in the world stages.China has achieved a great development since participated in World Trade Organization(WTO).Therefore, I want to express some of my opinions about the importance of the international trade for China’s development.Obviously, we can divide two parts of China’s international trade since,1949 .On the one hand,Chinese economy is likely to a self-sufficient society which is from 1949 to 1978.On the other hand,China has taken a policy which named Opening and Reform, China began to do international trade with all the countries.Compare to the self-sufficient society period, we have witnessed a great development and experienced a lot of benefit that brought by the international trade since 1978,so I will use some examples and my daily experiences to support the importance for the China’s development.First of all ,international trade can meet most of the needs of China’s economy.Besides this advantages,international trade can offer a higher life quality for all kinds of Chinese.Last but the most important ,international trade can make a great contribution to the continuing development of China.Based on these three reasons,I do believe that Chinese will decrease misunderstanding to international trade and gradually realize the importance of international trade for the......

Words: 977 - Pages: 4

International Trade

...International trade theories explain us how international trade will take place between different countries or different companies across borders. Global Strategic Rivalry Theory is one of the international trade theories and it had come into existence from 1980s and it was created with the ideas of “Economists Paul Krugman and Kelvin” (What is International Trade, n.d.), one of the major ideas of this theory is that it tells us how Multi National Companies use competitive advantage in the market against other international companies which are their competitors in the global market. This theory also states that MNC’s will face competition on the global scale and to a company to overcome that competition they have to compete with one other with their products. In this kind of the scenarios the major problems for a MNC is to entry into the market with their product and to tackle this problem the companies use different strategies like research and development about the opportunities and will get intellectual property rights and control of the raw material and etc. If we look at the recent “intellectual property wars” (Cusumano, 2013), between the companies Apple Inc and Samsung, this theory explains us how both the companies are trying to use the advantage of the competitive markets with their products and how they are using intellectual property rights to gain advantage over others. Due to intellectual property rights businesses have now more concerned to create original......

Words: 304 - Pages: 2

International Trade

...A troubling trajectory; International trade Competition in smartphones has intensified thanks to lower-cost rivals such as China's Xiaomi. It uses a similar supply chain, but slightly fewer parts are imported: the growing sophistication of Chinese manufacturers means that more components are being made at home. The rapid spread and subsequent slight retreat of such far-flung supply chains provides one possible explanation to a puzzle that is troubling policymakers: why international trade has been growing no faster than global GDP in the past few years. The notion of "peak trade" is being taken increasingly seriously. The composition of global demand could yet move back towards greater trade intensity, for several reasons. Whether trade is declining relative to GDP and why may not be clear for years. Yet one thing is: were more barriers to be lifted, especially in areas like services and farming where many still remain, it would probably lead to a new spurt in the evolution of supply chains that would lift trade far above today's "peak". Fears are growing that trade's share of the world's GDP has peaked. But that is far from certain WHEN Apple launched the iPhone in 2007, it deployed a state-of-the-art global supply chain. Although the pioneering smartphone was designed in America, and sold first to consumers there, it arrived in stores from Shenzhen, China. It had been assembled there by Foxconn International from parts made by two firms in Singapore, six in Taiwan and...

Words: 1438 - Pages: 6

The Development of the Classical Theories of International Trade Between Countries

...------------------------------------------------- The development of the classical theories of international trade between countries March 30, 2016 Danel Louw 17752302 March 30, 2016 Danel Louw 17752302 Contents Introduction 1 1 Mercantilism 2 2 Absolute Advantage 2 3 Comparative Advantage 3 4 Factor Proportions 4 5 Bibliography 6 * * Introduction International trade may seem simple. It is simply the exchange of goods between two people or entities from two different countries. People trade because they get some kind of benefit in the transaction. Sometimes it is something that they need and sometimes it is something that they desire. International trade it is not always that simple. There is a lot of theory, business strategy and policy behind it. International trade can be described in many different ways. There are many different theories, classical and modern, that we use to describe International trade. Mercantilism Mercantilism was developed in the sixteenth century. It was the first effort in developing an economic theory at the time. This theory stated that a country’s wealth was determined by the amount of its gold and silver holdings (Anonymous, 2012). Mercantilists believed that a country should increase its holdings of gold and silver by promoting exports and discouraging imports. In other words the government would use policies to encourage exports while restricting imports. They would do this by rewarding......

Words: 1083 - Pages: 5

International Trade

... International Trade CONTENTS INTRODUCTION 3 HISTORY 4 IMPORTANCE OF TRADE 5 INTERDEPENDENCE 6 LAW OF COMPARATIVE ADVANTAGE 7 BENEFITS OF DIVERSITY 7 COMPETITIVENESS 8 ECONOMIES OF SCALE 9 FREE TRADE 10 PROTECTIONISM 10 METHODS OF PROTECTIONISM 11 MEASURES OF TRADE 12 Global Trade Risk: 14 Types of Risk, Ways to Manage 14 CONCLUSION 17 REFERENCES 18 INTRODUCTION International trade has a big influence in our day-to-day lives, even if we do not realize it, it is a fact that almost every transaction or purchase we make, we are part of the global economy. This is because products or parts of the products have point of origin all over the world. International trade is the system by which countries exchange goods and services. Countries trade with each other to obtain products that are better quality, lower cost or just different from these goods produced at home. The goods and services that a country buys from other countries are called imports, and goods and services that are sold to other countries are called exports. While trade takes place mostly between businesses, companies and governments, individual also have a frequent participation on buying and selling goods internationally. Most international trade consists of the purchase and sale of industrial equipment, consumer goods, oil and agricultural products. In addition, services such as banking, insurance, transportation, telecommunications, engineering and tourism accounted have a big role and influence, to the......

Words: 3232 - Pages: 13

International Trade

...International Trade and Financial Market: Chapter 1: Issue of Globalization Globalization: Benefits: 1) Boost trade 2) Outsourcing companies benefits the most 3) Cut costs (segments below cons) 4) New experience for workers (working abroad) Shortcomings: 1) Certain segments loose their jobs. 2) Slides: Globalization: 1) Greater interdependence among nations 2) Trade, immigration, and foreign investments (find same products everywhere) 3) Movements of workforce, finance and goods 4) Cultural and environmental factors (for ex: language barriers so it can be a disadvantage) [environmental factors: environmental issues not applied in every countries, for ex polluting and dnt care about the environmental standards). 5) Occurs on political, technological, cultural and economic levels (integration of the aforementioned factors) History of Globalization: 1) 1870 – 1914 2) Technological improvements in transportation 3) Dominated by European and American businesses 4) Brought to an end by WW1 5) Great Depression prompted further limitations on trade and protectionism (protect local producers) Second wave of Globalization 1) 1945 – 1980 2) Result of reaction against nationalism following ww2 as well as lower transportation costs 3) Dominated by developed nations with developing nations largely excluded 4) Lead to a greater increase per capita income for developed countries than......

Words: 763 - Pages: 4

International Trade

...International trade plays a large role in expanding world’s economy and its relationship between different countries. More than 200 years ago, A. Smith made a conclusion that the international exchange of goods of all countries is a source of greater wealth. International trade creates opportunities for developing countries, specialization and economic use of resources. Each country produces goods that are profitable to produce. At the beginning of the nineteenth century D. Ricardo expanded international trade theory. He showed that the decisive factor is not productivity of each product, but ratio of the price in the country before the start of trading. Even if country is less efficient than other countries, it still can get the same returns as the countries that produce larger choice of goods. That international trade would be profitable you only need that in one area of production efficiency is higher than others. This change was strongly influenced by the Western countries. The international exchange was encouraged by demolition of the customs barriers and other obstacles, as well as increased specialization promotes trade between countries. INTERNATIONAL TRADE CONCEPT International trade - the buying and selling process, taking place in various countries, including sellers, buyers and brokers. Our interests in international trade for many reasons: the forces of production conditions, differences in various countries, the falling of the unit production costs in......

Words: 1135 - Pages: 5

International Trade

...International Trade Today, international trade has grown to be both complicated and essential to the survival of global economies for the future. International trade has been able to help third world countries improve their own economic system, therefore bettering the lives of the people who live there. For those countries who have opened themselves up to international trade, or world trade, they have opened a door for their economy to prosper and raise the living quality of all citizens (International Monetary, 2001). This in turn helps out the economy of all countries that trade. International trade is the trade of any good, service, funds, or anything else that can be traded between any person, company, and any type of organization in different countries (Griffin, 2010). This trading enables countries to use their assets to the best of their ability. By trading for something another country has, a country can save resources for making that product and use the resources to make something else they may need. World output is the total amount of economic production within a given time frame from all different countries. This would include any industries from goods to services. With world output measures the production of the economy, this tells where all goods are produced, which countries can produce which products more productively, and which countries are trading with which countries (Griffin, 2010). Knowing where the products are creates more international trade......

Words: 1003 - Pages: 5

International Trade

...International Finance Dr. Angela Ng FINA 342 HKUST Class Notes 2 BALANCE OF PAYMENTS (BOP) WHAT IS THE BALANCE OF PAYMENTS? An accounting statement that summarizes the economic transactions between residents of a home country and residents of all other countries. BOP is based on double-entry bookkeeping. Every transaction is recorded twice, once as a debit and once as a credit. According to accounting convention, a source of funds (either a decrease in assets or an increase in liabilities) is a credit and a use of funds (either an increase in assets or a decrease in liabilities) is a debit. Inflows are reported with a positive sign and are listed as a credit. Outflows are reported with a negative sign and are reported as a debit. Three major BOP categories: – Current Account: records flows of goods, services, and transfers. – Capital Account: shows public and private investment and lending activities. – Official Reserves Account: measures changes in holdings of gold and foreign currencies by official monetary institutions. By definition, the overall BOP must balance. (Current account balance) + (Capital account balance) ( (Official reserves account) = BOP = 0 BOP is related to the foreign exchange market. All transactions that affect the inflows and outflows of foreign currency are recorded in the BOP. Exhibit 2.1 Balance of Payments Categories |Credits (+) ...

Words: 1485 - Pages: 6