BSM 600 Chapter Notes - Chapter 9: Culture Of Switzerland, Candela, Pharmaceutical Industry
18 Feb 2017
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Via trade: sell and ship goods from one country to another. Via direct investment (di): building/acquiring productive assets in other countries. Sheltered industries: served exclusively by indigenous firms, Sheltered from imports and inward di, e. g. fragmented service industries (dry cleaning, funeral services) Stuff that"s hard to move (garden sheds) (lol what) Product is easy to transport, there are huge scale economies, can export from single location to exploit overseas efficiently, e. g. - commercial aircraft, shipbuilding, defence equipment. Also stuff where input is only from few locations, e. g. diamonds from. Multidomestic industries: via di because trade is infeasible. Or because products are nationally differentiated, e. g. frozen meals. Global industries: high levels of both trade and di. Large scale manufacturing, e. g. cars, consumer electronics, semiconductors, pharmaceuticals, beer, etc. Start with exports to country with small psychic distance, aka similar language, social norms, strong economic ties, etc. Then, subsidiary becomes more integrated, also undertakes manufacturing and replication.
