MGMT 1030 Lecture Notes - Lecture 4: Staples Thesis

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20 Jul 2016
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Study Questions for Norrie’s “The Staples Thesis”
1)What are staple products and what is the “staples thesis”?
- staples are commodities that have a high natural resource content produced for export
- the thesis is that the Canadian economy experienced growth due to exploitation and
exportation of primary resources i.e fish, fur, wheat, timber 4 primary staples products
- explains canadas early development..still exist in large quantities ie. Aberta n oil
2) What are some of the difficulties associated with a country’s reliance on staple
products?
- Company must be highly specialized,
- Other non staple sources of national economic growth n change are hard to
ignore, ie industrialization
- When demand for staples products is very high, canadas economy goes
high..when foreign demand falls..canadas economy is hurt
-
3) What are “linkages” and how are they important in the study of a staples economy?
- Linkages are spreading effects tht occur due to staple production
- There important because they allow the economy to grow and diversify
1. Backward linkage – raw labour/material ..simplest form ‘
2. Forward linkage- manufacturing/ process raw material moves economy forward
3. Lateral-
4. Final demand- consumer goods
Regions in Ontario , most, aren’t able to capture all 4 linkeages..since theyre reliant on
one specific stage, generally first one if they have raw resources
4)What are the limitations of the staples thesis?
- It cant be proved as right or wrong. Is not a theory
- It doesn’t explain why giving natural resources will sometimes result in high
incomes/ economic diversification or other times a poor and non diversified
economy
5)What is the “modified staples thesis” proposed by John McCallum?
- Exploitation of natural resources always generates wealth and linkage benefits
- Whoever captures the linkages and wealth depends on laws of trade/ government
policies, insitutions
6)What are “initial endowments”?
- Regions prior accumulation of population, financial capital, productive
capacity entrepreneurial class, and political power ..ontario had
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