MKC2610 Final: MKC2610 : mkc2610

• School: Monash University
• Department: Business - Marketing - MKC
• Course: MKC2610
• Professor: Yongfu He

Document Summary

Theories of international trade and the multinational enterprise. Comparative advantage theory: absolute advantage, comparative advantage, commodity terms of trade, principles of international trade, countries benefit from international trade, international trade increases worldwide production by specialization, exchange rates are determined primarily by traded goods. Factor endowment theory: every country has comparative advantage in production of certain product due to abundance of its factors of production. International product cycle theory: different countries have competitive advantages at different stage of a product"s life-cycle, facilitates production and marketing across countries. In a trickle down waterfall pattern: this is based on the assumption of, economies of scale, economies of scope, technology gap, preference similarity. Internalization/transaction cost theory: firms from developed nations exploit their proprietary knowledge and skills in less developed country markets. Internalization reduces transaction costs of dealing with market forces: bounded rationality and opportunism are two main factors responsible for high transaction cost in market force, resources-based view, appropriability theory.