Escolar Documentos
Profissional Documentos
Cultura Documentos
INTERNATIONAL
A MANAGERIAL PERSPECTIVE
BUSINESS
Chapter 5
International Trade and Investment Theory
1
Prentice Prentice Hall Hall 2002 International 2002 International Business Business 3e 3e
Chapter Objectives
After studying this chapter you should be able to:
Understand the motivation for international trade. Summarize and discuss the differences among the classical country-based theories of international trade. Use the modern, firm-based theories of international trade to describe global strategies adopted by businesses.
2
Prentice Hall 2002 International Business 3e
Describe and categorize the different forms of international investment. Explain the reasons for foreign direct investment. Summarize how supply, demand, and political factors influence foreign direct investment.
3
Prentice Hall 2002 International Business 3e
Trade
Trade is the voluntary exchange of goods, services, assets, or money between one person or organization and another.
6
Prentice Hall 2002 International Business 3e
International Trade
International trade is trade between residents of two countries. The residents may be individuals, firms, nonprofit organizations, or other forms of associations.
7
Prentice Hall 2002 International Business 3e
8
Prentice Hall 2002 International Business 3e
14
Prentice Hall 2002 International Business 3e
17
Prentice Hall 2002 International Business 3e
18
24
Prentice Hall 2002 International Business 3e
26
Prentice Hall 2002 International Business 3e
27
Prentice Hall 2002 International Business 3e
Internalization Theory
Transaction costs are the costs of entering into a transaction; that is, those connected to negotiating, monitoring, and enforcing a contract. Internalization theory suggests that FDI is more likely to occurthat is, international production will be internalized within the firmwhen the costs of negotiating, monitoring, and enforcing a contract with a second firm are high.
28
Prentice Hall 2002 International Business 3e
Political factors
Avoidance of trade barriers Economic development incentives
31
Prentice Hall 2002 International Business 3e
Chapter Review
International trade is an important form of international business. Because of trades importance to businesses and governments worldwide, scholars have offered numerous explanations for its existence. Coincident with the rise of the MNC, postwar research focused on firm-based explanations for international trade.
32
Prentice Hall 2002 International Business 3e
33
Prentice Hall 2002 International Business 3e