International Trade Theory
This chapter has two goals. The first goal is to review a number of theories that explain why it is
beneficial for a country to engage in international trade. The second goal is to explain the pattern
Globalization refers to the shift towards a more integrated and interdependent world economy.
The globalization of markets refers to the merging of historically distinct and separate national
markets into one huge global marketplace in which the tastes an
National Differences in Political Economy
Different countries have different political systems, economic systems, and legal systems.
Cultural practices can vary dramatically from country to country, as can the education and skill
level of the
Opening Case: Business Culture in China
The opening case explores how McDonalds lack of guanxi hampered the companys ability to
do business in China. When McDonalds initially entered China, it was confident that its
successes in other parts of the
This chapter explores the political reality of international trade. Free trade refers to a situation
where a government does not attempt to restrict what its citizens can buy from another country or
what they can sell to another country. Whil
The primary concern so far in this book has been with aspects of the larger environment in which
international businesses compete. Now, our focus shifts from the environment to the firm itself
and, in particular, to the actions managers can t
In this chapter we look at five questions:
Where in the world should productive activities be located?
What should be the long-term strategic role of foreign production sites?
Should the firm own foreign production activities, or is it bet
This chapter explores how an international business can perform marketing and R&D activities
to reduce the costs of value creation and add value by better serving customer needs. The
tension that exists in most international businesses betwee