BUSM028 Week 4 G4 by Rym Mouelhi https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga Please insert the key outcome of your conversations en-us 2021-03-22 11:14:05 UTC 2022-02-18 14:49:30 UTC hello@padlet.com The assumptions of the new trade theory include imperfect competition and economies of scale.The reason for the trade is the difference in price. To achieve relatively single production through division of labor, if there are economies of scale, it will reduce the average cost of production, thereby reducing prices and triggering trade. wenzhaozhu2 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055310084 2022-02-18 14:15:01 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055310084 room 1 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055311588 Neoclassical theory  focuses on supply and demand as the driving forces behind the production, pricing, and consumption of goods and services. New trade theory describes economic models in international trade theory which focuses on the role of increasing returns to scale and network effects ]]> 2022-02-18 14:15:47 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055311588 room 3 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055316428 Neoclassical models predict trade based on productivity or endowment differences
NTT is explains scale-based, intra-industry trade between similar countries with ambiguous but not uneven welfare effects...
There are many differences between the two. Both classical and neoclassical trade theories consider perfectly competitive markets. Neo-trade theory, on the other hand, begins to discuss monopolistic and oligopolistic markets. Both classical and neoclassical trade theories explain inter-industry trade and consider products to be homogeneous. The new trade theory, on the other hand, explains intra-industry trade under the horizontal division of labour and considers products to be heterogeneous. In terms of assumptions, classical trade theory assumes one factor of production, while neoclassical trade theory assumes two factors of production, capital and labour, with the new trade theory having a greater diversity of factors of production.
Also Neoclassical theory has no economies of scale and transportation costs
]]> 2022-02-18 14:18:31 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055316428 At present, enterprises in developing countries are small in scale and have few financing channels, so their ability to expand the market is limited, and production costs are high, which weakens the market competitiveness of enterprises in developing countries. wenzhaozhu2 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055317808 2022-02-18 14:19:17 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055317808 Room2 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055320063 The NTT introduced the concepts of economic geography, focuses on economies of scale and location of production within countries. It also looks at the history of the world and how it impacts the current international trade.]]> 2022-02-18 14:20:34 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055320063 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055325808 With the NTT developing countries tend to focus on specialise into industries and sectors that don't necessarily benefit their national economies but are advantageous for developed countries such as the US and the UK. 
Developing countries focus on more labour intensive and lower level skills while developed countries focus on high-skilled labour. 

]]> 2022-02-18 14:23:48 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055325808 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055330207 1. Improve resource utilization efficiency. According to the principle of comparative advantage of free trade, the export demand of a country's products with comparative advantage expands, and the industries based on the resources needed by such products can develop. Previously idle resources can be utilized.
2. Improve resource utilization efficiency. According to the principle of comparative advantage in free trade, the export demand of a country's products with comparative advantage expands, and industries based on the resources needed for such products develop
]]> 2022-02-18 14:26:20 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055330207 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055335090 The assumption of new trade theory is economies of scale and trade between similar countries because of differences in price. To achieve economies of scale single good is produced, which reduces the price of the good and trade for that good increases]]> 2022-02-18 14:29:07 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055335090 Room 3 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055337982 Comparative advantage could be seen as harmonious because according to comparative advantage, countries only trade what they are best at producing compared to other countries, leading everyone to only produce what they are good at and trade will occur between dissimilar countries and dissimilar goods, which was seen as 'harmonious'. With NTT this changes, intra-industry trade becomes more prominent as countries import the same products they export and similar countries now can produce similar goods which leads to product diversification due to an expansion of the market. This didn't lead to conflict between countries but made consumers more satisfied with choice. ]]> 2022-02-18 14:30:45 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055337982 Room 3 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055340511 The new trade theory better integrates the concepts of industrial organization theory and contract theory into the trade model of how enterprises allocate value chain in different countries, whether they import intermediate inputs within the enterprise boundary through FDI or purchase intermediate inputs from independent suppliers in the form of outsourcing. Therefore, the new trade theory focuses on the relationship between firm heterogeneity and export and FDI decisions, and the choice of each organizational form in international production. Therefore, the government should also pay attention to the international trade of multinational companies and formulate corresponding tax or import and export policies according to them]]> 2022-02-18 14:32:05 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055340511 ntt for developing countries will make them focus on the cause that is conducive to export profits, because usually innovation and development are main in developed countries, so developing countries will choose high-density labor industries to carry out, making the overall national development slow, although they can earn money https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055347444 2022-02-18 14:36:05 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055347444 An element of the new trade theory is that firms with an early entrant advantage can become the dominant firm in the market. The large economies of scale gained by the first firms mean that new firms cannot compete with incumbents. This means that in these global industries with very large economies of scale, the market is dominated by the early entrant firms, leading to a form of monopolistic competition. Governments need to develop policies to avoid the creation of malicious monopolies. https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055359596 2022-02-18 14:42:14 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055359596 so what type of policies are we talking about here ? can we give examples? rmouelhi1 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055363980 2022-02-18 14:44:48 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055363980 Room 3 https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055370821 However, even though in theory this seems good theoretically, there are a lot of factors that aren't taken into consideration. Past trade patterns have allowed the exploitation of resources of developing countries by developed countries. Colonialism is a prime example of this. Colonialism led to uneven trade patterns between the global north and the global south. The developed countries gained more power and now can dictate how the resources and labour in the global south can be used. However, this leads to a big number of political tensions and even trade wars and conflicts. More recently the trade war between China and the US has led to higher tariffs which means higher prices for consumers.]]> 2022-02-18 14:48:40 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055370821 we think because if it the location is important, many enterprises might want to enter that location and make profit, like to build the factory. however, if there are many competitors it would be conflict bewteen these firms because big firms would be more advantageous on it https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055372589 2022-02-18 14:49:30 UTC https://padlet.com/rmouelhi1/thhjtd3x7e3em2ga/wish/2055372589