GMS 724 Chapter 5: GMS 724 - Chapter 5 - The Statics and Dynamics of Trade - Part 3
30 Jan 2019
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Document Summary
Chapter 5 - the statics and dynamics of trade: part 3. Limitations of the diamond of national advantage theory: the existence of the four favourable conditions does not guarantee that an industry will develop in a given locale, entrepreneurs may face favourable conditions for many different lines of business. In fact, such japanese companies as uniden and fujitech target their sales almost entirely to foreign markets: companies and countries do not depend entirely on domestic factor conditions. In fact, many mnes now assemble productions with parts supplied from a variety of countries: companies react not only to domestic rivals but also to foreign- based rivals they compete with at home and abroad. Thus the prior domestic absence of any of the four conditions from the diamond may not inhibit companies and industries from gaining these conditions and becoming globally competitive.
