Description
Explain how nations can enhance their competitive advantage. What are the determinants of national competitiveness? Provide at least one example of a country with successful national industrial policies.
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Explanation & Answer
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Running head: MANAGEMENT
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Theories of International Trade and Investment
Institution Affiliation
Date
MANAGEMENT
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International Trade and Investments
The economic growth of any country or region is significantly dependent on international
trade and investments. These are essential drivers of economic growth and development.
International trade consists of the exchange of vital drivers that promote business growth, such as
capital, products, and services across international boundaries and territories. There are
international trade theories whose purpose is to describe the aspects of international trade (Patel,
2017). They have different categories of international such as comparative advantage,
competitive advantage, mercantilism, and others. In this study, our focus will be on the theory of
competitive advantage, determinants of national competitiveness, and a successful national
industrial policy.
Competitive Advantage
Some countries have assets and competencies that are distinctive to a firm. These are
acquired from the size or capacity of innovation strengths, cost, capacity to upgrade, and others
that are complex for competitors to replicate or copy. This theory of competitiveness seeks to
explain why some countries are more competitive in some sectors than others. The theory is
explained further through four determinants linked together. These determinants are conditions
of demand in the domestic market, resources and capabilities of the domestic market,
characteristics of domestic firms, and complementary industries, and local suppliersLubis, (R.
2018). This theory enables a country to produce products and services of the same value at a
lesser price or in a more profitable manner. Compared to rival markets, these conditions and
determinants enable a co...