Michael E. Porter. The Competitive Advantage of Nations. New York: Free Press, 1990. 855 pages. Hardbound. UK£ 25.

Zafar Mahmood

Abstract


Trade is a field of economics that is useful for investigating
the issue of economic competitiveness. A nation’s advantages in
competing against other nations are reflected in its performance in
international economic transactions. Earlier theories on trade
(Ricardian and Heckscher-Ohlin) analysed a nation’s inter-sectoral
comparative advantage. Due to the intuitive appeal of these theories,
governments have implemented various policies designed to improve
comparative advantage in factor costs by reducing interest rates and
resorting to devaluation, special depreciation allowances, export
financing, etc. There is now a growing awareness that these theories are
unrealistic as to many industries, although they can be useful in
explaining broad tendencies apparent in the patterns of
trade.

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DOI: https://doi.org/10.30541/v37i1pp.90-94

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