In a world of zero transportation costs, no trade barriers, and significant differences between nations with regard to factor conditions, firms must expand internationally if they are to
THIS IS THE FIRST response:
The theory of relative benefit recommends that exercises should occur in the nations that can perform them most productively, considering that various nations are supplied with various elements of creation. Assuming there are no boundaries or expenses to exchange, then, at that point, all things considered, numerous enterprises will be based out of the nations that give the best arrangement of component enrichments. Given area economies, an organization can foster a worldwide snare of significant worth creation exercises to exploit varying element blessings in contrasting areas.
For firms previously situated in the nations with the most ideal variable gifts for their industry, in any case, there may not be a need to grow globally at one point on schedule. As component blessings develop, the firm might need to scatter its worth making exercises to those business sectors that offer near benefits. In case the firm is in a cutthroat market, it will profit from worldwide extension that incorporates its worth making exercises in view of the expense position and item separation openings such development can present. A firm might have the option to make due in a neighborhood market without global extension, as long as the nearby market isn’t designated by contenders who enjoy taken benefit of the economies presented by scattering their worth creation exercises universally. A model is a wasteful, costly privately claimed store that has not yet confronted the section of Wal-Mart in its market.
HI, this is the second response:
The benefits for firms of higher individual and organizational productivity may be manifested in increased competitiveness and employment, or in the transfer of laboratories or low productivity sectors to high productivity sectors, because different countries have different inputs.Firm productivity can be measured by the output of each worker based on their market share and export performance. Productivity growth lowers production costs and increases returns on investments, some of which provide more income to entrepreneurs and investors, while others convert others into higher wages. The virtuous circle between productivity and employment also benefits the investment side of the economy, where part of the productivity benefits are reinvested in product and process innovation, improved factories and equipment and expansion measures into new markets, which in turn stimulates further growth in production and productivity. Individual productivity can be reflected in employment rates, wage rates, job stability, job satisfaction or employability in any job or industry. Due to the economy of the location, the company can develop a global network of value creation companies to leverage the talents of different agents in different locations. However, for companies already established in countries where factors are most favorable for their industry, it may not be necessary to expand internationally at some point. As factor fortunes grow, the company may want to deploy its value creation activities in markets that offer comparative advantages.If the business is in a competitive market, it will benefit from international expansion that includes value creation activities due to the cost position and product differentiation opportunities that this expansion can offer. The company can survive in the domestic market without international expansion, as long as the domestic market is not targeted by competitors who have benefited from the savings offered by the dispersion of value-creating activities internationally.If there are no barriers or costs to trade, many industries are likely to come from countries that offer the best combination of given factors.