Section outline

  • Unit Objectives
              1. Know the most important theories of international management
              2. Compare and contrast the main categories of preferential trade agreements
              3. Understand the rationale for the creation of both the European union and the Euro Zone
              4. Explain the role of the world trade organization in facilitating global trade relations among nations
              5. Understand the role and importance of preferential trade agreements and how they impact the international strategy of firms
    • Theories of International Trade (5:44) Page
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      Why do nations trade? This fundamental question must be answered in order to understand why and how governments intervene in international trade and influence business strategies. Basic economic theories that most students are familiar with from their undergraduate studies are repeated. Recently, neo-mercantilist beliefs seem to be restricting international trade, so a thorough understanding of these theories is important for international business management.

    • Factor Proportions Theory (4:29) Page
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    • International Product Life Cycle (4:48) Page
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    • Economic Integration and PTAs (3:34) Page
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      Despite some protectionism, the trend toward greater regional economic integration continues. Countries and their governments are seeking to "make their countries bigger" by reducing tariffs and other forms of trade barriers to facilitate the internationalization of markets and firms. This and the following screencasts discuss the evolution, forms, and consequences of market liberalization and the institutions that support it, such as the WTO.

    • Forms of Trade Barriers (3:54) Page
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    • Levels of Economic Integration (6:11) Page
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    • Advantages and Disadvantages of Economic Integration (5:04) Page
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    • Implications for the firm (4:39) Page
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      ♦ ♦ ♦ Did You Understand? ♦ ♦ ♦

    • 5. Self Assessment Quiz
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      ♦ ♦ ♦ Exercise Materials ♦ ♦ ♦

    • In-class exercise Etherpad Lite
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    • Case study Page
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    • Case study BMW Etherpad Lite
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      ♦ ♦ ♦ Recommended Readings/Resources (optional) ♦ ♦ ♦

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      Further Reading: Morschett et al. (2015) Chapter 6, p. 151-161; Cavusgil et al. (2016) Chapter 5, p. 142-163, Chapter 7, p. 198-222

    • World Trade Report 2023 URL
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      The World Trade Report is an annual publication that aims to deepen understanding about trends in trade, trade policy issues and the multilateral trading system.

    • Index of Economic Freedom URL
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