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Chapter Outline
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International Trade Theory

Opening Case
The Ecuadorian Rose Industry

Introduction

An Overview of Trade Theory
The Benefits of Trade
The Patterns of International Trade
Trade Theory and Government Policy
Mercantilism

Absolute Advantage

Country Focus
Is China a Neo-Mercantilist Nation?

Comparative Advantage
The Gains from Trade
Qualifications and Assumptions
Extensions of the Ricardian Model
Country Focus
Moving White-Collar Jobs Offshore

Heckscher-Ohlin Theory
The Leontief Paradox
The Product Life-Cycle Theory
Evaluating the Product Life-Cycle Theory
New Trade Theory
Increasing Product Variety and Reducing Costs
Economies of Scale, First Mover Advantages, and the Pattern of Trade
Implications of New Trade Theory
National Competitive Advantage: Porter's Diamond
Factor Endowments
Demand Conditions
Related and Supporting Industries
Firm Strategy, Structure, and Rivalry
Evaluating Porter's Theory
Management Focus

The Rise of Finland's Nokia

Implications for Managers

Chapter Summary

Critical Thinking and Discussion Questions

Research Task

Closing Case
Trade in Information Technology and U.S.
Economic Growth

Appendix
International Trade and the Balance of Payments





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