INTERNATIONAL BUSINESS

Materials developed under the European programme:

BIZNES MIĘDZYNARODOWY SYLLABUS 1. Dlaczego narody handlują ze sobą? Teorie wymiany międzynarodowej.

2. Co kształtuje wymianę? Czynniki geograficzne.

3. Co kształtuje wymianę? Czynniki polityczne. Czynniki prawne.

4. Co kształtuje wymianę? Czynniki kulturowe.

5. Co kształtuje wymianę? Czynniki ekonomiczne.

BIZNES MIĘDZYNARODOWY SYLLABUS 6. Handel zagraniczny. Definicje podstawowe.

7. Pośrednicy w obrocie międzynarodowym.

8. Organizacja obrotu. INCOTERMS 2000.

9. Organizacje międzynarodowe.

10.Co kształtuje wymianę? Czynniki ekonomiczne.

INTERNATIONAL BUSINESS International Trade Theories

Materials developed under the European programme:

Why do nations trade?

 Mercantilism  Absolute Advantage  Comparative Advantage  Hecksher-Ohlin Theorem  International Product Life Cycle

Mercantilism

 One of first economic doctrines (1550 to 1800)  Wealth measured in gold.

 accumulate gold by exporting more than importing  Since amount of gold is finite, trade is zero-sum  Assumes governments can control trade  France and Japan are modern “neomercantilist” examples

Absolute Advantage

 Adam Smith in

Wealth of Nations

 Produce and export goods at which each nation is most efficient  Labor is primary cost factor

Comparative Advantage

 Ricardo in 1817  Trade success although no absolute advantage in trade goods  Produce and export goods at which each nation is relatively most efficient  Labor is primary cost factor

Heckscher-Ohlin Theory

 Differences in production factors  Adds land and capital to labor as production factors that add value  Concentrate on goods requiring most abundant factor  Doesn’t account for  transportation costs  taste preferences  available technology

International Product Life Cycle

 Related to product life cycle theory in marketing

Intro.

Growth Maturity Decline

Time

International Product Life Cycle

Exports Imports Domestic Exports Foreign Production Foreign Competition time Domestic Sales Domestic Production Import Competition

Newer Explanations

 Economies of Scale/Experience Curve  Lindler Theory of Overlapping Demand  Porter’s Competitive Advantage of Nations

Lindler Theory of Overlapping Demand

 Focused on manufactured goods  Trade between nations with similar per capita income  Consumers’ demands are similar (overlapping)

Porter’s Competitive Advantage of Nations

 Four variables in competitive advantage  demand conditions  factor conditions  related and supporting industries  firm strategy, structure, competition

Trade Restrictions

 National defense  Infant industries  Protection of domestic jobs  Retaliation  Dumping  Export subsidies

Types of Restrictions

 Tariff Barriers  Ad Valorem  Specific   Compound

Taxes

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Value Added Tax

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Import/Export Taxes

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Excise duty

Non-Tariff Barriers

 Quantitative  quotas,  orderly marketing arrangements,  countertrade  Non Quantitative  government subsidies  standards

Economic Development

 Developed nations  Newly industrialized economies (NIEs)  Developing nations



Developed Nations

Western European nations  United States  Japan  Australia  New Zealand  Canada

Newly Industrialized Economies (NIEs)

 Brazil  Mexico  Malaysia  Thailand  Chile 

South Korea

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Taiwan

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Hong Kong

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Singapore

GNP/Capita as Indicator

 Widely used to compare nations  Values are estimated  Some GNP unreported  Barter trade not reported  Exchange rates may not reflect actual value  Assumes equal distribution  Include other measures

Characteristics of Developing Nations-1

 GNP/Capital less than $2,000  Unequal distribution  Technological dualism  Majority earn income from agriculture  Unproductive agriculture  Large unemployment figures

Characteristics of Developing Nations-2

 Health problems and malnutrition  High illiteracy  High population growth  Reliance on few products for export  Difficult topography  Low savings rate  Political instability