Instructional Module: Republic of The Philippines Nueva Vizcaya State University Bayombong, Nueva Vizcaya

IM No.
INTL 1-1STSEM-2020-2021
Republic of the Philippines
NUEVA VIZCAYA STATE UNIVERSITY
Bayombong, Nueva Vizcaya
INSTRUCTIONAL MODULE
College : Business Education Campus : Bayombong, Nueva Vizcaya
DEGREE Bachelor of Science COURSE NO. INTL 1

PROGRAM in Business
Administration
SPECIALIZATION Financial COURSE International Business and Trade
Management and TITLE
Business
Economics
YEAR LEVEL 2 and 3 TIME FRAME 6 hours WK 10- IM NO. 5
NO. 11
I. UNIT TITLE
International Trade Theory
II. LESSON TITLE

Lesson 1. Overview of Trade Theory
Lesson 2. Mercantilism
Lesson 3. Absolute Advantage
Lesson 4. Comparative Advantage
Lesson 5. Heckscher- Ohlin Theory
Lesson 6. The Product Life-Cycle Theory
Lesson 7. New Trade Theory
Lesson 8. National Competitive Theory: Porter’s Diamond
III. LESSON OVERVIEW
Trade is the exchange of goods and services between buyers and sellers. However, trade in
international business is then the exchange of goods and services between entities in two different
countries. Samue (2019) stated that trade allows the progress of technology that ends up playing the
crucial role in production and gains of competition. The basis of every country in dealing international
trade today are Mercantilism, Absolute Advantage, Heckscher-Ohlin Theory, the Product Life-Cycle
Theory, and New Trade Theory. These theories served a vast influence in every decision making in
international trade.
The study of Smith, Ricardo, and Heckscher-Ohlin 's classical trade theories showed that in a
world without trade barriers, trade patterns are defined in different countries by the relative productivity
of the various development factors. Countries will specialize in goods that they can manufacture most
effectively, while importing products that they can manufacture less effectively (Hill, 2013). Free trade
applies to a situation in which a government does not seek to regulate what can be purchased from or
sold to another nation by its people.
IV. DESIRED LEARNING OUTCOME
Lesson 1. Recite the benefits of international trade.

Lesson 2. Discuss the effect of Mercantilism Theory to countries which import products.
“In accordance with Section 185, Fair Use of Copyrighted Work of Republic Act 8293, the copyrighted works included in this material may be reproduced for educational
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NVSU-FR-ICD-05-00 (081220) Page 44 of 85

IM No. INTL 1-1STSEM-2020-2021
Lesson 3. Explain absolute advantage.

Lesson 4. Describe the benefits of comparative advantage between two countries.
Lesson 5. Discuss the advantages of Heckscher- Ohlin Theory.
Lesson 6. Enumerate and explain the three stages of Product Life Cycle Theory. Lesson
7. Explain the New Trade Theory.
Lesson 8. Enumerate and describe the Porter’s Diamond
V. LESSON CONTENT
Lesson 1. Overview of Trade Theory
Adam Smith was the first to explain that unrestricted free trade is beneficial to a country. Hill (2013)
defined free trade as a situation where a government does not attempt to influence through quotas or
duties what its citizens can buy from another country, or what they can produce and sell another
country. From the word “unrestricted”, barriers to entry are loosened.
There are advantages of international trade. As we all know not all countries are rich and blessed with
natural resources. Not all countries can produce all the needs of its countrymen. Here is an example
why international trade is beneficial according to Hill (2013) and Chan (nd).
• Greater variety of goods for consumption: It’s not feasible to grow oranges in Iceland but it
produces fish at a low cost. Thus, to include oranges in the daily diet of Icelanders, the country
may engage international trade with Brazil which is one of the top producers of oranges.
• Efficient allocation and better utilization of resources: When a country produces a good or
service for a lower opportunity cost than other countries it is called comparative advantage
(Amadeo, 2020). For example, Saudi Arabia produces oil at a lower cost, it is its advantage to
produce more and trade it to other countries which needed oil.
• Promotes efficiency in production. As countries try to adopt better methods of production to

keep costs down to remain competitive this promotes efficiency in production. Hence, USA may
specialize in the production and export of commercial jet aircraft since they have abundant raw
materials in the country.
• More employment. Establishment of new industries to cater international trade increases

employment. For example, USA imports textile to Bangladesh (due to lower wage compared to
USA), thus, textile industry needs more Bangladeshi workers.
• Consumption at cheaper cost. If it can’t be produced in its own country because of high cost,
it is better to trade with other countries which can offer at a lower cost. Back to the example of
Iceland, better if it will engage trading with Brazil rather than producing oranges which will just
make their cost higher due to its climate / topography.
• Reduces trade fluctuations. The prices of goods remain stable by making the size of the of
the market large with large supplies and extensive demand international trade reduces
fluctuations.
• Utilization of surplus produce. As stated earlier, Saudi Arabia produces enormous oil in
which it is more than enough the demand of Saudi Arabians, thus, excess oil is traded to other
countries which need oil.
• Fosters peace and goodwill. Trading goods and services with each other foster peace and
goodwill. Being trading partners result in good relationship, thus, avoiding war between them.

Lesson 2. Mercantilism
Mercantilism is the first theory of international trade. It emerged in England in the mid 16 th
century. Pettinger (2019) defined mercantilism as an economic theory where the government seeks to
regulate the economy and trade in order to promote domestic industry- often at the expense of other
countries.
Source: https://brewminate.com/exports-for-precious-metals-mercantilism-in-the-early-modern-world/
Figure 5.1 Gold
Gold and silver were the backbone of national wealth because it was used as currency to trade
between countries (Hill, 2013). Therefore, by exporting goods, a country may earn gold or silver.
Mercantilists recommended policies to maximize exports and minimize imports by implementing tariffs
and quotas to imported products. The country with most exports earns more gold and silver. This is
viewed as a zero-sum game in which a gain by one country results in a loss by another country. It is a
loss of a country if it has many imports rather than exports.
Mercantilism is considered obsolete today in terms of payment. Now, money or paper bills are
used to pay purchases. However, when it comes to import restrictions, some countries still adopt this
theory to defend locally entrenched industries. The United States, for example, implemented a
protectionist trade policy against Japan after the Second World War and negotiated voluntary export
restrictions with the Japanese government, which restricted Japanese exports to the United States
(Bloomenthal, 2020).
Lesson 3. Absolute Advantage
Adam Smith argued on the purpose of Mercantilism. He pointed out that countries differ in their ability
to produce goods efficiently. For example, Costa Rica
produces the largest amount of fresh pineapple in the world
due to its perfect topography, however, it imports appliances
from USA which is well-known on its technology advancement.
Hence, the term absolute advantage was created. When a
country produces goods in greater quantity with lower cost
compared to other countries, it is called absolute advantage.
It would be wise if a country should not produce goods that it
can buy at a lower cost from other countries. It is just a waste
of time, effort, and money if Philippines will produce its own oil
where it can import oil from Saudi Arabia at a lower cost.

Source:https://www.theatlantic.co
m
/entertainment/archive/2014/09/w
a
austen/379484/
Figure 5.2 Adam Smith

Key points by Chappelow (2020) are:
• The absolute advantage is that a manufacturer can make a product or service in higher
quantities at the same cost or in the same quantities at lower costs than other producers.
• The absolute advantage may be the basis of major trade gains between producers of various
products with different absolute advantages.
• A firm can always gain absolute advantage by specialization, division of labor, and trade.
Lesson 4. Comparative Advantage
David Ricardo’s question about absolute advantage was “What might happen when one country
has an absolute advantage in the production of all goods?” Such country might derive no benefits from
international trade. In this case, Ricardo formed comparative advantage. When a country can
manufacture a product or service at a lower cost compare to other country, a comparative advantage
occurs.
According to him, it makes sense for a country to specialize in production of goods that it
produces most efficiently and purchase goods that it produces less efficiently from other countries (Hill,
2013). Imagine if there is no trade between countries. Country must consume what it produces. But with
the advent of trade, two countries can increase their combined production.
Ricardo offered a clear and persuasive illustration that

demonstrated why two nations would exchange cloth for
wine and that both countries would benefit from that
exchange, even though one nation held a productivity
advantage over the other in the production of both items
(Evenett, 2017). For example, England produce cheap
cloth and Portugal produce cheap wine. England must
stop producing wine because it lacked the climate so with
Portugal should stop from producing cloth because it
doesn’t have the ability to produce at a cheap cost.
These two countries should trade each other so both are
benefitted by trading what they produced the most
Source:https://www.raptisrare efficiently (Amadeo, 2020).
books.com/david-ricardo-and-
his-works/
Figure 5.3 David Ricardo
Lesson 5. Heckscher- Ohlin Theory
A separate interpretation of the competitive

advantage was put forward by Swedish economists
Eli Heckscher and Bertil Ohlin. They stated that a
nation is endowed with resources such as land,
labor, and capital through factor endowments. The
theory argued that comparative advantage arises

from differences in national factor endowments (Hill, 2013). Business dictionary defined factor
endowment as amount of labor, land, money and entrepreneurship that could be exploited for
manufacturing within a country. This theory complements with Ricardo’s theory that free trade is
beneficial.
Source:https://www.vskills.in/certification/blog/t he-h-o-theory/
Figure 5.4 Eli Heckscher and Bertil Ohlin
Based on the first image (Figure 5.5) in which trade does not exist, Angola is rich in land, thus, it
produces many potatoes. On the other hand, it lacks labor, hence, it produces less shoes which
require labor intensive. Contrary, Botswana produces less potato and more shoes because it has small
portion of land and plenty of workers consecutively.
Source: http://faculty.washington.edu/danby/bls324/trade/hos.html
Figure 5.5 Illustration of Heckscher-Ohlin Theory
Based on the second image in which international market exist, Angola may export potatoes to
Botswana. On the other hand, Botswana may export shoes to Angola. These two countries may trade
their products via import and/or export.
Lesson 6. The Product Life-Cycle Theory
Hill (2013) discussed that Raymond Vernon proposed

the product life-cycle theory in mid- 1960s. There are
three stages of international product life cycle theory
namely: new product introduction; maturity stage; and
product standardization and streamlining of
manufacturing (LaMarco, 2019).

1. New product introduction- Many new products had been developed by U.S firms and first sold in
the U.S market like massproduced automobiles, televisions, instant cameras, photocopiers,
personal computers, and semiconductor chips. This happened because the wealth and size of the
U.S market gave U.S firms a strong incentive to develop new consumer products (Hill, 2013).
Source:https://prabook.com/web/r While demand of photocopier (new product) is starting to grow rapidly
aymond.vernon/695228 in the U.S, demand in other advanced countries is limited to high-
income groups. Since there is limited demand in other advanced
Figure 5.6 Raymond Vernon countries, company in that country does not make it feasible to start
producing photocopier. Advanced countries may import photocopiers
from United States.
2. Maturity stage- Over time, demand for photocopiers starts to grow in other advanced countries like
Great Britain, France, Germany and Japan. Thus, it becomes worthwhile for foreign producers to
begin producing for their home markets. U.S firms may also put up production facilities in those
advanced countries where demand is growing.
3. Product standardization and streamlining of manufacturing- Since the market of photocopier

matures in the United States and other advanced nations, the product becomes more standardized,
and prices becomes the main competitive weapon. Firm in advance countries may produce
photocopier in their home country as this cycle repeats when developing countries start also to
produce. In this case, they can produce the photocopier at a lower cost because of cheap labor and
other factors. In the end, firms in advanced or developing nations may now export photocopiers to
the United States. Ironically, U.S firms which first developed and exporter of photocopier to other
countries is now an importer of the said product.
Lesson 7. New Trade Theory
Pettinger (2017) stated that new trade theory (NTT) outweighs the more traditional theory of
comparative advantage. Moreover, Hill (2013) specified that NTT makes two important points: First,
through its impact on economies of scale, trade can increase the variety of goods available to
consumers and decrease the average cost of those goods. Economies of scale refers to production of
larger quantity of goods with fewer input costs. Second, in those industries when the output required to
attain economies of scale represents a significant proportion of total world demand, the global market
may be able to support only a small number of enterprises. Thus, world trade in certain products may
be dominated by countries whose firms were first movers in their production. First mover advantages
are the economic and strategic advantages that accrue to early entrants into an industry. Countries
may dominate in the export of certain goods because economies of scale are important in their
production, and because firms located in those countries were the first to capture scale economies and
giving them a first-mover advantage (Hill, 2013). First mover companies in a certain industry may
discourage subsequent entry of competitors.
Imagine if trade does not exist in the world. There are limited products because firms will just depend
on their country’s resources. The demand is also limited because people in the country are the sole
target market. Firms may not attain economies of scale if they produce less quantity thereby limiting
the variety of products available to consumers. Now, consider what happens if countries trade with
each other. Individual markets are combined into a larger world market, thus, demand increases: the
more demand, the more production. This means that a firm may be able to attain economies of scale.
Therefore, trade is mutually beneficial because it allows specialization of production, realization of
economies of scale, production of greater variety of products, and lower prices.
Lesson 8. National Competitive Theory: Porter’s Diamond
Michael Porter showed the result an intensive

research that attempted to determine why some

Source:https://www.isc.hbs
.edu/about-michael-
porter/Pages/default.asp
x IM No. INTL 1-1STSEM-2020-2021
Figure 5. 7 Michael Porter Bayombong, Nueva Vizcaya
nations succeed and others fail in international competition. Why does Japan do so
well in automobile industry? Why does Switzerland excel in the production and
export of precision instruments and pharmaceuticals? Why do Germany and the U.S
do so well in the chemical industry?
Porter argues that firms are most likely to succeed if the diamond is most
favorable to them. The diamond refers to the four determinants of national
competitive advantage namely: factor conditions; demand conditions; relating and
supporting industries; and firm strategy, structure, and rivalry.
Source: https://www.isc.hbs.edu/competitiveness-economic-development/frameworks-and-
keyconcepts/Pages/the-diamond-model.aspx
Figure 5.8 Porter’s Diamond Model
1. Factor Conditions
This is the most important factor among the four because large pool of skilled labor, technical
advancement, infrastructure, and money should be produced by the country itself. Japan, for
example, has established a competitive global economic footprint beyond the inherent wealth of the
region, in part by producing a very large number of engineers who have helped Japan drive
technological innovation (Chappelow, 2020).
2. Demand Conditions
This refers to the size and nature of the customer base for products, which also drives
innovation and product improvement. Porter argues that a nation’s firms gain competitive
advantage if their domestic consumers are sophisticated and demanding (Hill, 2013). Japanese are
sophisticated and knowledgeable with regard to cameras, thus, it helps stimulate Japan camera
industry to improve product quality and to introduce innovative models.
3. Related and Supporting Industries

This refers to upstream and downstream industries that facilitate innovation through exchanging
ideas. This correspond to the suppliers and customers who can represent either threats or
opportunities (Chappelow, 2020). Sweden 's success in imported steel products has built on the
strengths of the specialty steel industry in Sweden. The pharmaceutical success of Switzerland is
closely connected to its previous international success in the technologically associated dye
industry.
4. Firm Strategy, Structure, and Rivalry
This refers to the basic fact that competition leads to firms finding ways to increase production
and to the development of technological innovations. The concentration of market power, degree of
competition, and ability of rival firms to enter a nation’s market are influential here (Chappelow,
2020). Hill (2013) discussed that Porter makes two important points.
First, different nations are characterized by different management ideologies, which either help
them or do not help them to build national competitive advantage. For example, China is good in
manufacturing process, USA is good in product design, and United Kingdom is good in finances. It
makes them competitive over the other countries.
Second, there is a strong association between vigorous domestic rivalry and the creation and
persistence of competitive advantage in an industry. Domestic rivalry creates pressures to innovate, to
improve quality, to reduce costs, and to invest in upgrading advanced factors. Toyota, Mitsubishi, and
Honda belong to top 10 biggest company in Japan. These three giants continuously innovate and
improve their own automobile brand in order to beat domestic competitors.

VI. LEARNING ACTIVITIES MODULE 5
Name:_________________________________ Score:____________
Section:_______________ Date:_____________
Case Study: The Rise of Bangladesh's Textile Trade
Bangladesh, one of the world's poorest countries, has long depended heavily upon exports of
textile products to generate income, employment, and economic growth. Most of these exports are
lowcost finished garments sold to mass-market retailers in the West, such as Walmart. For decades,
Bangladesh was able to take advantage of a quota system for textile exports that gave it, and other
poor countries, preferential access to rich markets such as the United States and the European Union.
On January 1, 2005, however, that system was scrapped in favor of one that was based on free trade
principles. From then on, exporters in Bangladesh would have to compete for business against
producers from other nations such as China and Indonesia. Many analysts predicted the quick collapse
of Bangladesh's textile industry. They predicted a sharp jump in unemployment, a decline in the
country's balance of payments accounts, and a negative impact on economic growth.
The collapse didn't happen. Bangladesh's exports of textiles continued to grow, even as the rest
of the world plunged into an economic crisis in 2008. Bangladesh's exports of garments rose to $10.7
billion in 2008, up from $9.3 billion in 2007 and $8.9 billion in 2006. Apparently, Bangladesh has an
advantage in the production of textiles-it is one of the world's low-cost producers-and this is allowing the
country to grow its share of world markets. As a deep economic recession took hold in developed
nations during 2008-09, big importers such as Walmart increased their purchases of low-cost garments
from Bangladesh to better serve their customers, who were looking for low prices. Li & Fung, a Hong
Kong company that handles sourcing and apparel manufacturing, stated its production in Bangladesh
jumped percent in 2009, while production in China, its biggest supplier, slid 5 percent.
Bangladesh's advantage is based on a number of factors. First, labor costs are low, in part due
to low hourly wage rates and in part due to investments by textile manufacturers in productivity-boosting
technology during the past decade. Today, wage rates in the textile industry in Bangladesh are about
$50 to $60 a month, less than half the minimum wage in China. While this pay rate seems dismally low
by Western standards, in a country where the gross national income per capita is only $4 70 a year, it is
a living wage and a source of employment for some 3 million people, 85 percent of whom are women
with few alternative employment opportunities.

Another source of advantage for Bangladesh is that it has a vibrant network of supporting
industries that supply inputs to its garment manufacturers. Some threequarters of all inputs are made
locally. This saves garment manufacturers transport and storage costs, import duties, and the long lead
times that come with the imported woven fabrics used to make shirts and trousers. In other words, the
local supporting industries help to boost the productivity of Bangladesh's garment manufacturers, giving
them a cost advantage that goes beyond low wage rates.
Bangladesh also has the advantage of not being China! Many importers in the West have grown
cautious about becoming too dependent upon China for imports of specific goods for fear that if there
was disruption, economic or other, their supply chains would be decimated unless they had an
alternative source of supply. Thus, Bangladesh has benefited from the trend by Western importers to
diversify their supply sources. Although China remains the world's largest exporter of garments, with
exports of $120 billion in 2008, wage rates are rising quite fast, suggesting the trend to shift textile
production away from China may continue. Bangladesh, however, does have some negatives; most
notable are the constant disruptions in electricity because the government has underinvested in power
generation and distribution infrastructure. Roads and ports are also inferior to those found in China.
Case Discussion Questions
1. Why was the shift to a free trade regime in the textile industry good for Bangladesh?
2. Who benefits when retailers in the United States source textiles from low-wage countries such as
Bangladesh? Who might lose? Do the gains outweigh the losses?

3. What international trade theory, or theories, best explain the rise of Bangladesh as a textile
exporting powerhouse?
4. How secure is Bangladesh's textile industry from foreign competition? What factors could ultimately
lead to a decline?
Source: Hill, C. (2013). International Business Competing in the Global Marketplace. Retrieved August
13, 2019 from https://www.belstu.by/Portals/0/Charles-Hill-International-Business.pdf

VIII. ASSIGNMENT MODULE 5
Name:_________________________________ Score:____________
Section:_______________ Date:_____________
1. Discuss briefly the benefits of international trade.

2. What is the difference between Mercantilism and Absolute Advantage?
3. What is the similarity of Comparative Advantage and Heckscher- Ohlin Theory
4. Enumerate and discuss the three stages of International Product-Life Cycle Theory.

5. Describe New Trade Theory
6. Enumerate and discuss the four determinants of National Competitive Theory
VII. EVALUATION (Note: Not to be included in the student’s copy of the IM)
VIII. REFERENCES
Amadeo (2020). Comparative Advantage: Theory and Examples. Retrieved September 28, 2020 from
https://www.thebalance.com/comparative-advantage-3305915
Bloomenthal, A. (2020). Mercantilism. Retrieved September 28, 2020 from
https://www.investopedia.com/terms/m/mercantilism.asp

Chappelow, J. (2020). Porter Diamond. Retrieved September 28, 2020 from

https://www.investopedia.com/terms/p/porter-diamond.asp
Chand, S. (nd). 8 Benefits of International Trade-Export Management. Retrieved September 28, 2020
from https://www.yourarticlelibrary.com/trade-2/8-benefits-of-international-trade-
exportmanagement/5914#:~:text=The%20benefits%20that%20can%20be,as%20a%20medium
%20of %20exchange.&text=Nations%20with%20strong%20international%20trade,to%20control
%20th e%20world%20economy.
Evenett, S. (2017). The Principle of Comparative Advantage 200 Years on: Introducing a new Book.
Retrieved September 28, 2020 from https://voxeu.org/article/principle-comparative-
advantage200-years-new-ebook
Hill, C. (2013). International Business Competing in the Global Marketplace. Retrieved August 13, 2019
from https://www.belstu.by/Portals/0/Charles-Hill-International-Business.pdf
LaMarco, N. (2019). The Three Stages of the International Product Life Cycle Theory. Retrieved
September 28, 2020 from https://smallbusiness.chron.com/three-stages-international-
productlife-cycle-theory-
19364.html#:~:text=The%20International%20Product%20Life%20Cycle%20Theory%20was%20
authored%20by%20Raymond,stages%20contained%20within%20the%20theory.
Factor Endowment. Retrieved September 28, 2020 from
http://www.businessdictionary.com/definition/factor-endowment.html
Pettinger, T. (2017). New Trade Theory. Retrieved September 28, 2020 from
https://www.economicshelp.org/blog/6957/trade/new-trade-
theory/#:~:text=New%20trade%20theory%20(NTT)%20suggests,can%20occur%20in%20key%
20industries.&text=New%20trade%20theory%20also%20becomes,explaining%20the%20growt
h%20of%20globalisation.
Pettinger, T. (2019). Mercantilism Theory and Examples. Retrieved September 28, 2020 from
https://www.economicshelp.org/blog/17553/trade/mercantilism-theory-and-examples/
Samue, A. (2019). International Trade and Its Impact on the Global Economy. Retrieved September 26,
2020 from
htts://www.researchgate.net/publication/335703233_International_Trade_and_Its_Impact_on_th
e_Global_Economy

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IM No.

College : Business Education Campus : Bayombong, Nueva Vizcaya

DEGREE Bachelor of Science COURSE NO. INTL 1

International Trade Theory

II. LESSON TITLE

III. LESSON OVERVIEW

IV. DESIRED LEARNING OUTCOME

Lesson 1. Recite the benefits of international trade.

NVSU-FR-ICD-05-00 (081220) Page 44 of 85

Lesson 3. Explain absolute advantage.

Lesson 1. Overview of Trade Theory

• Promotes efficiency in production. As countries try to adopt better methods of production to

• More employment. Establishment of new industries to cater international trade increases

NVSU-FR-ICD-05-00 (081220) Page 45 of 85

Figure 5.1 Gold

Lesson 3. Absolute Advantage

NVSU-FR-ICD-05-00 (081220) Page 46 of 85

IM No. INTL 1-1STSEM-2020-2021

Key points by Chappelow (2020) are:

Lesson 4. Comparative Advantage

Ricardo offered a clear and persuasive illustration that

Figure 5.3 David Ricardo

Lesson 5. Heckscher- Ohlin Theory

A separate interpretation of the competitive

NVSU-FR-ICD-05-00 (081220) Page 47 of 85

Figure 5.4 Eli Heckscher and Bertil Ohlin

Figure 5.5 Illustration of Heckscher-Ohlin Theory

Lesson 6. The Product Life-Cycle Theory

Hill (2013) discussed that Raymond Vernon proposed

NVSU-FR-ICD-05-00 (081220) Page 48 of 85

3. Product standardization and streamlining of manufacturing- Since the market of photocopier

Lesson 7. New Trade Theory

Lesson 8. National Competitive Theory: Porter’s Diamond

Michael Porter showed the result an intensive

NVSU-FR-ICD-05-00 (081220) Page 49 of 85

Figure 5.8 Porter’s Diamond Model

3. Related and Supporting Industries

NVSU-FR-ICD-05-00 (081220) Page 50 of 85

4. Firm Strategy, Structure, and Rivalry

NVSU-FR-ICD-05-00 (081220) Page 51 of 85

VI. LEARNING ACTIVITIES MODULE 5

Case Study: The Rise of Bangladesh's Textile Trade

NVSU-FR-ICD-05-00 (081220) Page 52 of 85

Case Discussion Questions

NVSU-FR-ICD-05-00 (081220) Page 53 of 85

NVSU-FR-ICD-05-00 (081220) Page 54 of 85

VIII. ASSIGNMENT MODULE 5

1. Discuss briefly the benefits of international trade.

NVSU-FR-ICD-05-00 (081220) Page 55 of 85

2. What is the difference between Mercantilism and Absolute Advantage?

3. What is the similarity of Comparative Advantage and Heckscher- Ohlin Theory

NVSU-FR-ICD-05-00 (081220) Page 56 of 85

5. Describe New Trade Theory

6. Enumerate and discuss the four determinants of National Competitive Theory

NVSU-FR-ICD-05-00 (081220) Page 57 of 85

Chappelow, J. (2020). Porter Diamond. Retrieved September 28, 2020 from

NVSU-FR-ICD-05-00 (081220) Page 58 of 85

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