Please enable JavaScript.
Coggle requires JavaScript to display documents.
International Trade Theories, images , pngtree-blue-economy-grow-chart…
International Trade Theories
HECKSCHER-OHLIN THEORY
Economic theory that argues countries export what they can most efficiently produce.
Countries should ideally export materials and resources that they have an excess of
STRATEGIC TRADE THEORY
Explores how government intervention in international trade can give domestic industries a competitive edge in global markets, particularly in industries characterized by imperfect competition, such as oligopolies
PRODUCT LIFE CYCLE THEORY
The theory suggests that early in a product's life-cycle all the parts and labor associated with that product come from the area where it was invented. After the product becomes adopted and used in the world markets, production gradually moves away from the point of origin.
PORTER’S DIAMOND MODEL
Describes the competitive advantage that nations or groups possess based on factors available to them.
Designed to describe the effect that attributes of domestic markets have on the competitive advantege of firms or nations in the international market.
NEW TRADE THEORY
It focuses on the role of network effects and increasing returns to scale in explaining global trade patterns
GRAVITY MODEL OF TRADE
It predicts trade flows between two countries based on their economic sizes and the distance between them.
Used to analyze the impact of trade policies and agreements,Applied to other bilateral flows like migration and investment.
FACTOR PROPORTIONS THEORY
Economic theory stating that if a country has a relative abundance of a factor
Factors: Land, labor, entrepreneurship, capital.
CLASSICAL
THEORIES
Comparative Advantage
A country has a comparative advantage in producing a good if it can produce it at a lower opportunity cost than another country.
Absolute Advantage
A country has an absolute advantage if it can produce a good more efficiently than other country
MERCANTILISM
dominant economic theory from the 16th to the 18th centuries,emphasizing the accumulation of wealth, primarily gold and silver, through a positive balance of trade.
BALVYS MARIA SALAZAR LOPEZ - 19130054
INTERNATIONAL ECONOM
