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Modern firm based theories: Intraindustry trade p189-190 - Coggle Diagram
Modern firm based theories: Intraindustry trade p189-190
Trade between 2 countries of a product or service in the same industry
For example; Japan trade Toyota cars with Germany for German cars, BMW's
Intraindustry trade
Why?
Consumer preferences are similar to domestic market
Country similarity theory
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Suggests that most trade in goods should be between countries with similar per capita incomes & intraindustry trade should be common
Per capita incomes = real GDP/Population of the country
Differentiated goods
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Brand names & product reputation play an important role in consumer decision making
Undifferentiated good
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Brand name and rep don't play a part in consumer purchasing decisions
