Market Globalization by Firms from Emerging Markets and Small Countries: An Application of the Neoclassical Trade Model

18 Pages Posted: 15 Oct 2009

See all articles by Tamir Agmon

Tamir Agmon

Tel Aviv University, Faculty of Management

Date Written: July 15, 2009

Abstract

The changes in globalization and in the world of international business make it necessary to rethink the basic model of the economics of international business. For most of the 2nd half of the 20th century international business was about how large companies in the developed countries increase their value via international business activities. Not surprisingly the research in the economics of international business from Caves, Kindleberger, and Hymer to Buckley and Casson, Dunning, and many others was based on models of industrial organization. The world has changed and international business has become a two-way street where firms and governments from emerging markets and small countries are as active as the developed countries MNEs and their governments. In this paper the basic international trade model is used to gain insights of the new world of international business. In particular, a dynamic model of changing factor intensity and of creating local specific competitive and comparative advantages for firms and governments from emerging markets is presented and discussed.

Keywords: Economics of international business, international trade models, emerging markets

JEL Classification: F11, F23, O14

Suggested Citation

Agmon, Tamir, Market Globalization by Firms from Emerging Markets and Small Countries: An Application of the Neoclassical Trade Model (July 15, 2009). Available at SSRN: https://ssrn.com/abstract=1489623 or http://dx.doi.org/10.2139/ssrn.1489623

Tamir Agmon (Contact Author)

Tel Aviv University, Faculty of Management

Ramat Aviv
Tel Aviv
Israel
+972504896333 (Phone)

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