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International Business The New Realities 4th Edition Cavusgil Solutions Manual
International Business The New Realities 4th Edition Cavusgil Solutions Manual
CHAPTER 7
I. LECTURE STARTER/LAUNCHER
■ Governments have long intervened in international business, hindering the free flow of
trade and investment.
■ Intervention can take many forms- tariffs and quotas, restrictions on international
investment, bureaucratic procedures and red tape, regulations that restrict value-chain
activities. Governments can also provide subsidies and financial incentives intended to
sustain or develop domestic firms and industries.
■ Although studies have found a strong association between market openness
(unimpeded free trade) and economic growth, as well as the fact that market
liberalization and free trade are robust contexts for fostering economic growth and
national living standards, in reality:
There is no such thing as unimpeded free trade.
■ Ask your students to think about government intervention- what are the pros and
cons? Make two lists, pros on one side and cons on the other. Why is there no such
thing as unimpeded free trade? That is, what is the justification for government
intervention? By contrast, why is free trade good? (The answer can be found in Chapter
5: Theories of International Trade and Investment.)
■ Ask students whether their favorite country is a member of an economic bloc- which
one. Ask them what advantages/disadvantages being in this bloc brings to their country.
[1] YOUTUBE
William Spaniel
International Relations 101 (#9): Tariffs and the Barriers to Free Trade
Published on Jul 11, 2012
Modeling free trade as a prisoner's dilemma provides an explanation. Although
everyone is collectively better off with free trade, individual incentives tell states to place
tariffs on imported goods. Thus, although the result is collectively crazy, it is individually
rational.
https://www.youtube.com/watch?v=Kc-bgKyPDz4
8.33 Minutes
LEARNING OBJECTIVES
After studying this chapter, students should be able to:
Key Themes
■ In this chapter, there are eight themes:
[1] The nature of government intervention
[2] Instruments of government intervention
[3] Evolution and consequences of government intervention
[4] How firms can respond to government intervention
[5] Regional integration and economic blocs
[6] The leading economic blocs
[7] Advantages and implications of regional integration
Teaching Tips
■ The challenge for this chapter is how to get students excited about something that is a
macro-environmental force, over which businesses have little or no control. Corporate-
level strategic decisions that firms can control concern whether to compete or not to
compete in a particular business/market. Before such a decision can be crafted,
management should conduct a country-specific analysis of barriers to entry in the form
of intervention, regulations, and restrictions, vs. market openness and degree of
economic freedom. This would be part of Due Diligence.
2×6
This “2 × 6” was to show the length and width of the grave they
would have. Not only that, but the negroes that they could impose
upon and get to vote the democratic ticket received, after they had
voted, a card of safety; and here is that card issued to the colored
people whom they had induced to vote the democratic ticket, so that
they might present it if any white-leaguers should undertake to
plunder or murder them:
New Orleans, Nov. 28, 1874.
WILLIAM ALEXANDER,
President 1st Ward Col’d Democratic Club.
Attest:
J. H. HARDY, Ass’t Sec. Parish Committee.