Modern Methods of International Trade Analysis

Modern methods
of international
trade analysis

2
International Trade
Analysis
• International Trade is referred as the exchange of
goods and services between one and more countries
(Feenstra, 2015)
• Allows the trade to flow in and expand the market for
products and services
• Provides opportunities to consumers and countries
to avail the products and services not available in
their home country
• Export and import the two concepts of International
trade
• Improves the potential of a country to produce and
acquire goods

3
Theories of
International Trade
There are many theories starting from the Classical theories to Modern
theories to explain about the International trade (Gilpin, 2016).
Traditional
Country-based
theories
• Comparative Advantage
• Mercantilism
• Heckscher-Ohlin
• Absolute Advantage
Modern Firm-based
theories
• Product Life Cycle
• Country Similarity
• Global strategic Rivalry
• Porter’s National
Competitive Advantage

4
GDP- Gross
Domestic
Product
• Gross Domestic Product is the overall economic activity
of a country (Scholl & Schermuly, 2018)
• It derives the value of finished products and services in
terms of it monetary value produced by a country within
a specific time period
• GDP is calculated both quarterly and annually basis
(Coyle, 2015)
• Can be calculated in terms of expenditures, incomes
and production by a country
• Helps policy makers and businesses to make decisions
strategically
• Helps businesses to analyze the market changes