International
Chap 4.
Business
Huang Huiping
International Trade:
Theories and Policies (国际贸易理论与政策)
Learning Objectives:
(课堂教学目标)

Review different theories that explain trade flows between nations;

Learn Competitive Advantage Theory

Review the various policy instruments used to restrict imports and promote the
exports;

Understand the implications that the International trade theories and the policies
hold for business practice.
Content and Schedule : (本章主要内容与学时计划)

Review Different theories that explain trade flows between nations; 15’

Competitive Advantage Theory 20 ’

Review the various policy instruments used to restrict imports and promote the
exports;

(Students’ self-study)
The implications that the International trade theories and the policies hold for
business practice.
10’
Special Attention(重点与难点)

重点: Competitive Advantage Theory

难点: The implications that the International trade theories and the policies hold
for business practice.
Teaching Design
(主要教学方法)

Instructing

Students’ self-study
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4.1 International Trade Theory
 Mercantilism
 Absolute Advantage Theory
 Comparative Theory
 H-O Theory
 The Product Life-Cycle Theory
 The New Trade Theory
 Nation’s Competitive Advantage
4.2 National Competitive Advantage
 In 1990, Michael Porter of the Harvard Business School , The Competitive
Advantage of Nations
 The essential task was to explain why a nation achieves international success
in a particular industry.(Japan’s automobile industry,Switzerland’s precision
instruments,Germany and the United States chemical industry)
Four broad attributes of a nation shape the environment
 Factor endowments
-
Basic factor
-
Advanced factor
-
relationship
 Demand conditions
-
Are domestic consumers sophisticated or demanding?
 Relating and supporting industries
-
Spillover effects from investment in advanced factor of production in relating
and supporting industries
 Firm strategy, structure, and rivalry
-
different management ideology;
-
Vigorous domestic rivalry may result persistent competitive advantage
-
Two additional variables
Two additional variables
 chance :can reshape industry structure and provide the opportunity for one
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nation's firms to supplant another's.
 government. can detract from or improve national advantage.
机遇
企业战略、结构
和竞争
生产要素
需求条件
相关及支持产业
政府
4.3 Implications
 Location implications
- Different countries have particular advantages in different production activities.
 First-mover implications
-
Firms that establish a first-mover advantage with regard to the production of a
particular new product may subsequently dominate global trade in that
product.
-
Strategic Trade Policy
 Policy implications
-
Firms involved in international trade can and do influence government policy
toward trade. By lobbying government, business firms can promote free trade
or trade restrictions.
-
Invest education;
-
Subsidies
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Assignments
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(本章课外作业)
Written Problem sets:书面作业
Case Study : 印度软件业的崛起
作为一个相对贫穷的国家，印度通常不会被认为是一个能够在高科技行业(如计算机软件)
建立强大实力的国家。但是，在 10 年多一点的时间里，印度的软件工业让其怀疑者大吃一
惊，从默默无闻一跃而成全球软件行业的主力军，在 1991~1992 年及 1996~1997 年，印度
软件公司的销售额以每年 53％的综合速度增长。1991~1992 年，该行业的销售总计达 388
亿美元。1996-1997 年，销售额大约是 18 亿美元。到 1997 年，印度拥有超过 760 家软件公
司，160 000 软件工程师，是世界上该类人才的第 3 大集聚地。这些增长大多是由出口推动
的。1985 年，印度的软件出口价值不足 1 000 万美元。在 1996~1997 年出口达到了 11 亿美
元，并计划 2000-2001 年达到 40 亿美元。作为这—增长的证明，许多外国软件公司都在印
度软件开发企业大量投资，包括微软、IBM、Oracle 及冠群(Computer Associates)这 4 家以
美国为墓地的最大的软件公司。
印度软件业的大部分增长都是建立在对外国客户的合同基础之上，或为外国客户工程
项目工作上。例如，许多印度公司为国外顾客维护应用、转换编码或者把软件从一个平台
移到另一个平台。印度公司还逐渐参与国外客户的重要开发项目。例如．印度最大的软件
公司 TCS 与安永(Ernst &Young)公司结成同盟，在其盟约下，TCS 将为安永公司的全球客户
开发和维护按顾客要求所研制的软件。TCS 还同微软结成开发联盟，在其盟约下，公司根
据微软的视窗 NT 操作系统和 SQL 服务器数据库技术为印度股票市场开发了无纸全国股票
受托系统。
虽然印度信息技术的基础结构薄弱，但印度软件业还是发展起来了。有 10 亿人口的印度，
1997 年只有 180 万台个人组装电脑。每百人只有 1．5 根电话线，印度的固定电话线的接人
率即便不是世界最低，也为亚洲最低之一。1997 年互联网联结数只有 45 000 户，与之相比，
美国有 3 000 万户。但其个人电脑的销售开始腾飞；1998 年预计售出 50 万台，印度主要城
市移动电话的迅速发展在某种程度上弥补了固定电话线的匮乏。
在解释其行业的成功时，印度软件企业指出了一系列因素。虽然印度总的教育水平较低，
但印度重要的中产阶级却受到良好的教育，印度的高等教育机构具有世界水平。而且，印
度一直强调工程方面的教育。从国际视角来看，还有一个很大的有利因素是：英语是印度
许多中产阶级的工作语言——从英国统治时期遗留下来的。然后就是：工资率。在美国，
软件工程师越来越少，他们的基本工资已经上升到该国任何职业群体中最高工资之一了，
入门水平的程序员每年就可挣 70000 美元。相比之下，在印度，入门水平的程序员起薪是 5
000 美元，这用国际标准来衡量是很低的，但用印度标准来看却已很高了。印度程序员的工
资上升很快，但他们的生产率也增长很快。1992 年，每位软件工程师的生产能力为 21 000
美元。到 1996 年，这一数字上升到了 45 000 美元。许多印度公司现在相信他们已经达到了
在软件开发方面实现规模经济及在重要的全球伙伴与客户眼中取得合法性所要求的足够数
量。
还有一个对印度有利的因素是：卫星通信消除了同外国客户做生意的距离障碍。因为软
件只不过是一连串 0 和 1，因此可以以光速传递到世界任何—个地点，其成本微不足道。在
通信便捷的世界，印度的地理位置赋予了它时间带来的优势。印度公司可以寻求快速扩张
其外购软件服务的国际市场，包括扩大远程维护市场。印度工程师可以在他们的西方公司
的用户们还在睡觉时连夜排除软件故障、升级系统或处理数据。
为了保持竞争地位，印度软件公司现在正在培训方面和尖端编程技术方面大量投资。他
们也是国际质量标准的热心采纳者，尤其是 ISo9000 认证。印度公司还正在尝试涉足应用
和压缩包装软件生意，主要是针对国内市场的应用。不过，印度公司迟早将开始同诸如微
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软、Oracle、人民软件(PeopleSoft)和 SAP 等软件公司在应用软件方面进行竞争。
案例讨论题
1．比较优势理论怎样解释印度软件业的崛起?
2．赫克歇尔—俄林理论怎样解释印度软件业的崛起?
3．用迈克尔·波特的钻石理论分析印度软件业的崛起。这种分析能帮助解释印度软件业
的崛起吗?
4．上述哪种理论——比较优势理论、赫克歇尔—俄林理论和波特的理论——对印度软件
业的崛起给出了最好的解释?为什么?
Reading Assignments (阅读任务)
Read Chapter 5,6
For next class:
 Read Chapter 7
 Prepare for discussion for the opening case
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CRITICAL DISCUSSION QUESTIONS AND ANSWERS
课后练习参考答案
Chpt 5
1. “Mercantilism is a bankrupt theory that has no place in the modern world.” Discuss.
Answer: Mercantilism, in its purest sense, is a bankrupt theory that has no place in the
modern world. The principle tenant of mercantilism is that a country should maintain a
trade surplus, even if that means that imports are limited by government intervention. This
policy is bankrupt for at least two reasons. First, it is inconsistent with the general notion of
globalization, which is becoming more and more prevalent in the world.
A policy of
mercantilism will anger potential trade partners because it will exclude their goods from free
access to the mercantilist country’s markets. Eventually, a country will find it difficult to
export if it imposes oppressive quotas and tariffs on its imports. Second, mercantilism is
bankrupt because it hurts the consumers in the mercantilist country.
By denying its
consumers access to either “cheaper” goods from other countries or more “sophisticated”
goods from other countries, the mercantilist country’s ordinary consumers suffer.
2. Is free trade fair?
Discuss!
Answer: This question is designed to stimulate class discussion. Trade theory tells suggests
that specialization and free trade benefits all countries. However, a case can be made in
some situations for imposing trade barriers. For example, if a developing country is trying
to establish an industry, trade barriers may be needed in the short term until the industry can
become competitive. While it could be argued that another country could make the product
more efficiently already, is it fair to limit a country’s ability to develop its industrial base?
3. Unions in developed nations often oppose imports from low-wage countries and advocate
trade barriers to protect jobs from what they often characterize as “unfair” import competition.
Is such competition “unfair?”
(a)
the unions
(b)
the people they represent
(c)
the country as a whole
Do you think that this argument is in the best interests of
Answer: The theory of comparative advantage suggests that a country should specialize in
producing those goods that it can produce most efficiently, while buying goods that it can
produce relatively less efficiently from other countries. Furthermore, the theory suggests
that opening a country to free trade stimulates economic growth, which creates dynamic gains
from trade. Therefore, it would follow that if low-wage countries can make certain products
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more efficiently than high wage countries, the low wage countries should produce and export
those products.
While trade barriers may protect workers and companies, they are a
short-term fix at best.
Moreover, by protecting industries, the government is not
encouraging companies to become more efficient. Instead, they are promoting inefficiency.
Consumers lose out because they have higher prices and less choice.
4. What are the potential costs of adopting a free trade regime? Do you think governments
should do anything to reduce these costs?
What?
Answer: Students will probably be divided on this question, and a lively debate should ensue.
For example, certainly, students will probably recognize that by adopting a free trade regime,
jobs will be lost in some industries, however they may not agree on exactly what should be
done about the jobs losses. Some students might suggest that the government provide
retraining programs while others may argue that people lose their jobs everyday and don’t get
government assistance to find new ones.
5. Reread the country focus feature on outsourcing service jobs.
Is there is a difference
between the transference of high paying white collar jobs, such as computer programming
and accounting, to developing nations, and low paying blue collar jobs?
If so, what is the
difference, and should government do anything to stop the flow of white- collar jobs out of
the country to countries like India?
Answer: This question is likely to generate a lively debate. Many students will suggest that
the outward flow of white-collar jobs is indeed a serious issue, one that should be the focus of
government attention. Students taking this perspective are likely to suggest that white-collar
jobs are more important to the nation’s future, and that they should remain at home.
Other
students however, may argue that companies cannot afford to pay the higher wages
commanded by white-collar jobs and still remain profitable. Therefore, the argument might
be that by taking these jobs outside the country, the company is able to remain viable, and
keep other people employed.
6. Drawing upon the new trade theory and Porter’s theory of national competitive advantage,
outline the case for government policies that would build national competitive advantage in a
particular industry. What kind of policies would you recommend that the government adopt?
Are these policies at variance with the basic free trade philosophy?
Answer: Porter’s theory of national competitive advantage argues that four broad attributes of
a nation shape the environment in which local firms compete, and that these attributes
promote or impede the creation of competitive advantage.
These attributes are: factor
endowments, demand conditions, related and supporting industries, and firm strategy,
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structure, and rivalry. Porter goes on to argue that firms are most likely to succeed in
industries in which the diamond (which are the four attributes collectively) is favorable.
Porter adds two factors to the list of attributes described above: chance and government
policy. The New Trade theory addresses a separate issue. This theory argues that due to
the presence of substantial scale economies, world demand will support only a few firms in
many industries. Underpinning this argument is the notion of first-mover advantages, which
are the economic and strategic advantages that accrue to early entrants into an industry. One
could argue that when the attributes of a nation are conductive to the production of a product,
and when the manufacturers of that product have experienced some “chance” events that have
provided them first-mover advantages, the governmental policies of that nation should
promote the building of national competitive advantage in that particular area. This could
be accomplished through government R&D grants, policies that favor the industry in capital
markets, policies towards education, the creation of a favorable regulatory atmosphere, tax
abatements, and the like. Ask your students whether they think this policy is at variance
with the basic free trade philosophy. One could argue that it is, because the government
intervention is creating the basis for comparative advantage. Conversely, one could argue
that if a country establishes a comparative advantage in a particular area that is based on a
unique set of attributes (such as Swiss production of watches), world output will be favorably
impacted by letting that country pursue its area of comparative advantage.
7. The world’s poorest countries are at a competitive disadvantage in every sector of their
economies. They have little to export. They have no capital; their land is of poor quality;
they often have too many people given available work opportunities; and they are poorly
educated. Free trade cannot possibly be in the interests of such nations! Discuss.
Answer: This is a difficult question. Certainly, most students will recognize that these
countries are in dire straights and need assistance from richer countries. Most students will
probably be sympathetic to their cause and suggest various aid programs including education
and monetary support to help the countries develop. However, others may be more cautious
and promote the notion that assistance would have to come in an organized form with
multiple nations working together. The question is an interesting one that should provide
students with an eye-opening experience.
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Chpt 6
1. Do you think the U.S. government should consider human rights when granting
preferential trading rights to countries?
What are the arguments for and against taking such
a position?
Answer: China is frequently cited as a violator of human rights, and can form the basis for a
discussion of this question. While the answer to the first question clearly is a matter of
personal opinion, in stating their opinions, students should consider the following points.
Trade with the U.S. is very important to China, as China views the U.S. as an important
market. The U.S. is also an important source of certain products. Thus, the U.S. has some
leverage with trade when trying to influence China’s human rights policies.
For this policy
to have much effect, however, other nations important to China must adopt similar policies.
Otherwise China will simply choose to work with other countries, and U.S. consumers and
producers may be more negatively impact than the Chinese. Another concern with tying
MFN status to human rights is that denying MFN may make the human rights situation worse
rather than better. By engaging in trade, the income levels in China will increase, and with
greater wealth the people will be able to demand and receive better treatment.
2. Whose interests should be the paramount concern of government trade policy - the interests
of producers (businesses and their employees) or those of consumers?
Answer: The long run interests of consumers should be the primary concern of governments.
Unfortunately consumers, each of whom may be negatively impacted by only a few dollars,
are less motivated and effective lobbyists than a few producers that have a great deal at stake.
While in some instances it could be argued that domestic consumers will be better off if
world-class domestic producers are nurtured and allowed to gain first mover advantages in
international markets, it is doubtful that the government will be better than international
capital markets at "picking winners", and will more likely pick the firms with the greatest
political clout. While employees may well lose jobs if there are more efficient foreign
competitors, some would argue that this is just the nature of competition, and that the role of
government should be to help these employees get jobs where they can be efficiently
employed rather than to protect them from reality in inefficient firms.
3. Given the arguments relating to the new trade theory and strategic trade policy, what kind
of trade policy should business be pressuring government to adopt?
Answer: According to the textbook, businesses should urge governments to target
technologies that may be important in the future and use subsidies to support development
work aimed at commercializing those technologies. Government should provide export
subsidies until the domestic firms have established first mover advantages in the world
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market. Government support may also be justified if it can help domestic firms overcome
the first-mover advantages enjoyed by foreign competitors and emerge as viable competitors
in the world market.
In this case, a combination of home market protection and
export-promoting subsidies may be called for.
4. You are an employee of an U.S. firm that produces personal computers in Thailand and
then exports them to the U.S. and other countries for sale. The personal computers were
originally produced in Thailand to take advantage of relatively low labor costs and a skilled
workforce. Other possible locations considered at that time were Malaysia and Hong Kong.
The U.S. government decides to impose punitive 100 percent ad valorem tariffs on imports of
computers from Thailand to punish the country for administrative trade barriers that restrict
U.S. exports to Thailand. How should your firm respond? What does this tell you about
the use of targeted trade barriers?
Answer: As long as the manufacturing requirements haven't changed significantly, looking at
Malaysia or Hong Kong again for production would appear obvious.
By the U.S.
government introducing a specific ad valorem tariff on Thai computer imports, it would be
easy to get around these by looking at other locations. Hence such targeted trade barriers
can often be easily circumvented without having to locate production facilities in an
expensive country like the U.S.
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