ARBUS301 Lecture Notes - Lecture 4: Absolute Advantage, Competitive Advantage, Comparative Advantage
16 Dec 2019
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Document Summary
Mercantilism: the belief that national prosperity is the result of a positive balance of trade maximize exports and minimize imports. Con: if one country has a positive balance, then another country has to have a negative balance. Absolute advantage principle: a country should produce only those products in which it has absolute advantage or can produce using fewer resources than another country. China is a low labor cost production base. India"s bangalore region offers a critical mass of it workers. Ireland"s repositioning enabled a sophisticated service economy. Dubai, a previously obscure emirate, has been transformed into a knowledge-based economy. Superior features of a country that provide it with unique benefits in global competition derived from either national endowments or deliberate national policies. Distinctive assets or competencies of a firm derived from cost, size, or innovation strengths that are difficult for competitors to replicate or imitate.
