Tiếng anh chuyên ngành: INTERNATIONAL BUSINESS

ADVANTAGES OF WORLD TRADE Develop economy, create wealth Increase output of goods, enable countries to exploit comparative advantages Consumers benefit from wider choices and lower prices Increase opportunities for market expansion and specialization

INTERNATIONAL BUSINESS

ADVANTAGES OF WORLD TRADE

 Develop economy, create wealth

 Increase output of goods, enable

countries to exploit comparative

advantages

 Consumers benefit from wider choices and lower prices

 Increase opportunities for market

expansion and specialization

FACTORS LEADING TO EFFICIENT

PRODUCTION OF SOME CERTAIN GOODS IN

DIFFERENT COUNTRIES

 Climate

 Natural resources

 Geographical location

 Feature of working population

 Technological development

 Economic mechanism & policies

changes of factors Changes of production ability

THEORETICAL BACKGROUND FOR INTERNATIONAL TRADE

 Theory of absolute advantages by Adam Smith

- Absolute advantage: ability to produce

some goods most effectively (oil in Saudi Arabia, coffee in Brazil, diamond in South Africa…)

 Theory of comparative advantage by

David Ricardo

- Comparative advantage: ability to produce

some goods more cheaply than others

(e.g China has comp advantages in

producing labor-intensive goods, the

USA-in makUSA-ing capital-USA-intensive goods &

farming produce…)

THEORETICAL BACKGROUND

(cont.)

THEORETICAL BACKGROUND

(cont.)

Absolute and/or comparative advantages: Effective production of certain goods

Low costs, High productivity High output Good quality

High specialization and international exchange

REASONS FOR GOV CONTROL OF FOREIGN TRADE

 Gain benefit from trade surplus

 Ensure trade balance

 Protect infant or important domestic

industries from competition

 Maintain national basic skills

 Avoid structural unemployment and

negative reactions from the public and

labour unions

 React against restrictions imposed by

other nations

 Ensure national security and

independence

GOV CONTROL METHODS

 Export encouragement

- Offer subsidies to exports

- Organize trade promotion missions

- Provide marketing information

- Offer tax benefits or incentives

- Apply for preferential trade clauses

- Joint inter trade organizations: GATT, APEC, WTO…

- Sign common trade expansion

agreements

 Import restriction or protectionism

GOV CONTROL METHODS (cont.)

Tariff barriers

+ Complicated procedures

+Import duties +Quotas

Non-tariff barriers

+Cultural and social difference

+Economic difference (Gov involvement) +Legal and political difference

(local-content law and business-practice law)

 Disadvantages of protectionism

- Favor producers, not consumers

- Limit competition and

production effectiveness

- Increase prices to consumers

- Cause frictions between

nations

GOV CONTROL METHODS (cont.)

“Globalization is one of the ten

most important trends affecting

the future of the world”

(John Naisbett)

“Globalization is one of the ten

most important trends affecting

the future of the world”

(John Naisbett)

DEVELOPMENT OF MULTINATIONAL FIRMS

 Multinational corporation is a company

that designs, produces and markets

products in many countries (the highest involvement in international business)

DEVELOPMENT OF MULTINATIONAL FIRMS - ADVANTAGES

 For the firm

- Expand business

opportunities, production and market scales

- Exploit comp

advantages to improve

production efficiency

- Develop global

philosophy of management, marketing and production

 For the local country

- Promote technology transfer, new skill training, investments and job creation

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