Chapter 6 - Trade Theory

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Comparative Advantage Absolute Advantage Porter's Diamond New Trade Theory Competitive advantage of nations
Jodie Arnold
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Jodie Arnold
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Chapter 6 - Trade Theory
  1. Nation level Explanations
    1. Contemporary Theories
      1. National industrial Policy
        1. New Trade Theory
          1. Economies of scale
          2. Porter's Diamond Model
            1. factor endowments
              1. demand conditions
                1. firm structure and strategy rilvary
                  1. related supporting industries
                  2. Competitive advantage of nations
                  3. Classical Theories
                    1. Mercantilism
                      1. Country Surplus - zero sum game
                      2. Absolute advantage principle
                        1. Adam Smith - specialise in what they are efficient in
                        2. Comparative Advantage principle
                          1. Riccardo- opportunity cost
                          2. Factor proportions theory
                            1. Heckscher-Ohlin
                              1. Leontief Paradox
                              2. International Product Cycle Theory
                                1. 3 stages, new product, maturing and standardised
                            2. Firm level explanations
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