week one: Theoretical basis for international trade and investment
OBJECTIVES FOR THE WEEK
• Compare and contrast the major trade theories.
• Describe the product life cycle in the context of globalization. • Assess the implications of foreign direct investment (FDI). • Assess the overall impact on a country of shifting from a limited trade position to a global trading position using trade theories.
This Course in Context
Today, we find ourselves in a marketplace that is increasingly integrated, interdependent, borderless, and globalized. Companies, both large and small, from developed and developing countries, are crisscrossing the globe in search of trade and investment havens in the context of globalization. A major driver of globalization is competition. Left unchallenged, companies (Nike & Coca-cola) that already compete in the global arena may gain so much market share and become so entrenched that it may be difficult, if not impossible, for other companies to enter such markets in the future and gain advantage, such as access to raw materials, lower production costs, cheap labor, increased revenues, and profits. With this week’s discussion on the theoretical underpinnings of globalization, the following weeks will focus on additional aspects of international trade and investment. Specifically, we will focus on the Global Monetary System, and its crucial role in promoting global trade flows; we will analyze the effects of the balance of payments on global trade; we will look at relevance of regional integration on trade; we will analyze the role of global, international, and regional organizations in facilitating trade; and finally, we will evaluate how all of these activities converge to either promote or inhibit international economic development.
What You Already Know
Students will start this course with a detailed knowledge of global business as learned in GBM/380. Students should have a global...