Implications of the Product Life Cycle theoryOffers an accurate explanationoftheinternationaltradepattern:For international business:-thelocationofproduction,-the time to enterforeign market:-the entry way
Implications of the Product Life Cycle theory ❖ Offers an accurate explanation of the international trade pattern. ❖ For international business: - the location of production; - the time to enter foreign market; - the entry way
(2)TheNewTradeTheoryTheoryof IncreasingReturns toscaleMainviews(1)There is still a basis for mutually beneficial trade based oneconomies of scale, even if two nations are identical ineveryrespect.(2)The benefits will be from increasing productivity anddecliningofunitcost.(3) Learning effect: cost saving from learning by doing(4)Iftheoutputrequiredtorealized significantscaleeconomies represents a substantial proportion of totalworld demand of that product, theworld market may beable to support onlya limited numberof firms producingthatproduct
(2) The New Trade Theory Theory of Increasing Returns to scale Main views (1)There is still a basis for mutually beneficial trade based on economies of scale, even if two nations are identical in every respect. (2)The benefits will be from increasing productivity and declining of unit cost. (3) Learning effect: cost saving from learning by doing. (4) If the output required to realized significant scale economies represents a substantial proportion of total world demand of that product, the world market may be able to support only a limited number of firms producing that product
Implications of TheoryofIncreasing Returns toscale.First-moveradvantage:theeconomic andstrategic advantage that accrueto early entrants into anindustry.WheredoestheFirst-moveradvantagecome from?good luck?Innovation?Entrepreneurship?Governmentintervention?Airbus &Boeing examplesTherequired minimum scale of productionandthe maximum demand oftheproduct in the world
Implications of Theory of Increasing Returns to scale ❖ First-mover advantage :the economic and strategic advantage that accrue to early entrants into an industry. ❖ Where does the First-mover advantage come from? - good luck? - Innovation? - Entrepreneurship? - Government intervention? ❖ Airbus & Boeing examples ❖ The required minimum scale of production and the maximum demand of the product in the world
表1两家企业竞争空中客车公司生产不生产波音公司0-5生产-51000100不生产00
生 产 生 产 空中客车公司 不 生 产 不 生 产 波音公司 －5 －5 0 0 100 100 0 0 表1 两家企业竞争