Theories of International Trade and Investment

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Question Description

Explain how nations can enhance their competitive advantage. What are the determinants of national competitiveness? Provide at least one example of a country with successful national industrial policies.

Your well-written paper should meet the following requirements:

7 pages in length (not include cover, reference page)

Support your analysis by referencing and citing at least 5 scholarly sources in addition to embedding course material concepts and principles.

Use APA style guidelines, citing references as appropriate.

course references:

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Chapter 5 Theories of International Trade and Investment International Business: The New Realities S. Tamer Cavusgil, Gary Knight, John R. Riesenberger Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. Outline • Apple’s Global Advantages • Why Do Nations Trade? • How Can Nations Enhance Their Competitive Advantage? • Why and How Do Firms Internationalize? • How Can Internationalizing Firms Gain and Sustain Competitive Advantage? • Closing Case: Hyundai: Leading the Way in the Global Auto Industry Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 2 Objectives • 5.1 Appreciate why nations trade. • 5.2 Learn about how nations can enhance their competitive advantage. • 5.3 Understand why and how firms internationalize. • 5.4 Explain the strategies internationalizing firms use to gain and sustain competitive advantage. Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 3 Apple’s Global Advantages • 5-1. Explain why most Apple products are made outside the firm’s home country, the United States. • 5-2. What is comparative advantage? How does Apple benefit from comparative advantage? • 5-3. Describe the problems that Apple experienced with its supplier Foxconn. What steps did Apple take to resolve the problems? Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 4 Theories of International Trade and Investment Exhibit 5.1 Theories of International Trade and Investment (Cavusgil, 2016, p.115) Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 5 Why Do Nations Trade? • Classical Theories ▪ ▪ ▪ ▪ Mercantilism Absolute advantage principle Comparative advantage principle Factor proportions theory and the Leontief Paradox ▪ International product life cycle theory ▪ New trade theory Exhibit 5.3 Illustration of Vernon’s International Product Life Cycle (Cavusgil, 2016, p.120) Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 6 How Can Nations Enhance Their Competitive Advantage? • The Competitive Advantage of Nations Exhibit 5.4 Components of National Competiveness: Comparative Advantage and Competitive Advantage (Cavusgil, 2016, p.123) • Determinants of National Competitiveness • National Industrial Policy Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 7 Why and How Do Firms Internationalize? • Internationalization Process of the Firm Exhibit 5.7 Stages in the Internationalization Process of the Firm (Cavusgil, 2016, p.127) • Born Global Firms ▪ Start-ups that initiate international business soon after their founding ▪ International entrepreneurship Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 8 How Can Internationalizing Firms Gain and Sustain Competitive Advantage? • FDI-Based Explanations – the preferred entry strategy of MNEs ▪ Monopolistic Advantage Theory ▪ Internalization Theory • Dunning’s Eclectic Paradigm ▪ Ownership-specific advantages ▪ Location-specific advantages ▪ Internalization advantages • Non-FDI-Based Explanations ▪ International Collaborative Ventures ▪ Networks and Relational Assets Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 9 Closing Case: Hyundai: Leading the Way in the Global Auto Industry Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 10 Summary • Why nations trade • How nations enhance their competitive advantage • Why and how firms internationalize • How internationalizing firms can gain and sustain competitive advantage Copyright © 2017, 2014, 2012 by Pearson Education, Inc. All rights reserved. This publication is protected by Copyright, and permission should be obtained from the publisher prior to any prohibited reproduction, storage in a retrieval system, or transmission in any form or by any means, electronic, mechanical, photocopying, recording, or likewise. 11 ...
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Tutor Answer

mwalimumusah
School: UT Austin

Attached.

Running head: ENHANCEMENT OF NATIONAL COMPETITIVENESS

Enhancement of National Competitiveness
Student’s Name
Institutional Affiliation

1

ENHANCEMENT OF NATIONAL COMPETITIVENESS

2

Enhancement of National Competitiveness
The level of a country's competitiveness on the global scale plays a pivotal role in
determining the quality of life of its citizens. For any country to enhance its national
competitiveness, it must embrace a wide range of policies, institutions, and adjustments in its
social, economic, and cultural systems (Hull, 2017). For a national economy to be placed in a
good performance in the assessment scale it has to be viable and posses’ ability to life quality for
the citizens. This concept is, however, relative because it relies on the nation’s approximate
capability to compete with others in terms of investments and human capital while experiencing
a steady growth at the same time. Though various agencies purport to rank countries in terms of
their national competitiveness, the World Economic Forum's annual competitiveness is the only
institution that has the moral authority to give a national competitive report of countries.
Determinants of national competitiveness advantage may vary slightly as given by
various quarters, but there is always a general and pivotal point of national productivity. Factor
conditions, supporting & related industries, Firm strategy, structure & Rivalry demand
conditions, microeconomic factors, Endowments, and data, are all critical determinants that
cannot be ignored. One of the most fundamental determinants of national competitiveness is
industrialization. The prosperity of a nation in the realm of competitiveness is never inherited but
instead created, and this happens through the adoption of systems that work to promote the
creation and development of novel ideas. It also does not emanate from the countries labor pool,
interest rates, natural endowments or even its currency value as per Classical economics
(Keynes, 2018), but it stems from a nation’s ability to shape the future of its production of food,
machines, and any other elements that enhance the quality of life. This aspect holds much of
what a country could be proud of depends on industrialization capacity, upgrading and degree of

ENHANCEMENT OF NATIONAL COMPETITIVENESS

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innovation. World over, it has been shown that companies from different economic sectors may
gain competitiveness milestone out of pressure. National creativity, innovativeness for a long
time was known to be a U.S.A affair, but of late the rate of industrialization based on innovation
has increased in many other countries. In a case where policies of the ruling government are
favoring the country's industrialization, it translates that the development future of the countries
will be good.
Another critical determinant of national competitiveness is affordable and highly skilled
labor. A country that does not have enough people to w...

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