International Trade and Investment Theory

International Trade

• Trade: voluntary exchange of goods, services, assets, or money between one person or organization and another
• International trade: trade between residents of two countries

Classical Country-Based Trade Theories

• Mercantilsm
• Absolute Advantage
• Comparative Advantage
• Comparative Advantage with Money
• Relative Factor Endowments

Modern Firm-Based Trade Theory

• Country Similarity Theory
• Product Life Cycle Theory
• Global Strategic Theory Rivalry
• Porter's National Competitive Advantage