CHAPTER 1
Globalization 3
Opening Case
The Rise of Ecuador’s Rose Industry 3
Introduction 4
What Is Globalization 5
The
Globalization of Markets 5
The
Globalization of Production 6
Management Focus
Vizio and the Market for Flat-Panel TVs 8
The Emergency of Global Institutions 8
Drivers of Globalization 10
Declining
Trade and Investment Barriers 10
The Role of
Technological Change 12
The
Changing Demographics of the Global Economy 14
The
Changing World Output and World Trade Picture 14
The
Changing Foreign Direct Investment Picture 15
Country Focus
India’s Software Sector 16
The
Changing Nature of the Multinational Enterprise 18
The
Changing World Order 19
The Global
Economy of the Twenty-First Century 20
Management Focus
China’s Hisense-An Emerging Multinational 21
The Globalization Debate 22
Antiglobalization
Protests 22
Country Focus
Protesting Globalization in France 23
Globalization, Jobs, and Income 24
Globalization,
Labor Policies, and the Environment 26
Globalization
and National Sovereignty 27
Globalization
and the World’s Poor 28
Managing in the Global Marketplace 29
Chapter Summary 31
Critical Thinking and Discussion Questions 32
Research Task 32
Closing Case
Who Makes the Apple iPhone? 33
Endnotes 34
CHAPTER 2
International Trade Theory 37
Opening Case
Creating the World’s Biggest Free Trade Zone 37
Introduction 38
An Overview of Trade Theory 38
The
Benefits of Trade 38
The Pattern
of International Trade 39
Trade
Theory and Government Policy 40
Mercantilism 40
Absolute Advantage 41
Country Focus
Is China a Neo-mercantilist Nation? 42
Comparative Advantage 44
The Gains
from Trade 45
Qualifications
and Assumptions 46
Extensions
of the Ricardian Model 47
Country Focus
Moving U.S. White-Collar Jobs Offshore 50
Heckscher-Ohlin Theory 52
The
Leontief Paradox 52
The Product Life-Cycle Theory 53
Product Life-Cycle Theory in the 21st century 54
New Trade Theory 56
Increasing
Product Variety and Reducing Costs 56
Economies
of Scale, First-Mover Advantages, and the Pattern of Trade 57
Implications
of New Trade Theory 57
National Competitive Advantage: Porter’s Diamond 58
Factor
Endowments 60
Demand
Conditions 60
Related and
Supporting Industries 60
Firm
Strategy, Structure, and Rivalry 61
Evaluating
Porter’s Theory 61
Implications for Managers 62
Chapter Summary 63
Critical Thinking and Discussion Questions 64
Research Task 65
Closing Case
The Rise of India’s
Drug Industry 65
Appendix
International Trade and
the Balance of
Payments 67
Endnotes 69
CHAPTER 3
The Political Economy of International Trade 73
Opening Case
China Limits Exports of
Rare Earth Metals 73
Introduction 74
Instruments of Trade Policy 75
Tariffs 75
Country Focus
Are the Chinese Illegally Subsidizing Auto Exports? 76
Subsidies
76
Import
Quotas and Voluntary Export Restraints 77
Local
Content Requirements 78
Administrative
Policies 79
Antidumping Policies 79
Management Focus
U.S. Magnesium Seeks Protection 80
The Case for Government Intervention 81
Political
Arguments for Intervention 81
Country Focus
Trade in Hormone-Treated Beef 83
Economic
Arguments for Intervention 84
The Revised Case for Free Trade 85
Retaliation
and Trade War 85
Domestic
Politics 86
Development of the World Trading System 86
From Smith
to the Great Depression 87
1947–1979: GATT,
Trade Liberalization, and Economic Growth 87
1980–1993:
Protectionist Trends 87
The Uruguay
Round and the World Trade Organization 88
WTO:
Experience to Date 89
The Future
of the WTO: Unresolved Issues and the Doha Round 90
Country Focus
Estimating the Gains from Trade for America 93
Implications for Managers 94
Chapter Summary 96
Critical Thinking and Discussion Questions 96
Research Task 97
Closing Case
U.S. Tariffs on Tire Imports from China 97
Endnotes 98
Cases
Legal Outsourcing 101
The Global Financial Crisis and Protectionism 102
Glossary 104
