MGMT 1030 Lecture Notes - Lecture 4: Staples Thesis

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20 Jul 2016
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
- 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
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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