From Smith to Porter: an analysis of foreign trade theories

  • Eduardo Senra Coutinho UFMG; FACE; CEPEAD
  • Fernando de Vilhena Lana-Peixoto UFMG; FACE; CEPEAD
  • Paulo Zschaber Ribeiro Filho UFMG; FACE; CEPEAD
  • Hudson Fernandes Amaral UFMG; FACE; Departamento de Ciências Administrativas
Keywords: International trade, Comparative advantages, Competitive advantages, National competitiveness

Abstract

The classic theory of foreign trade explains international trade beginning with the relative productivity of the factors of production to show that the flow of commerce results from an initial endowment in these factors. Countries must specialize in the production of goods for which they have a competitive advantages stemming from the abundance of the factors involved in this production. The theory of competitive advantages further empirically explains the competitive capacity determinants of certain countries in order to perceive how these advantages are achieved in international commerce. An answer is sought for the key question of why companies based in certain countries attain international success in the diverse segments and industries. A comparative analysis includes the classic theories of foreign trade and their future developments, models based upon the development of the internal market and on monopolistic competition as well as the contribution of Porter to this subject.

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Published
2005-12-01
How to Cite
Coutinho, E., Lana-Peixoto, F., Ribeiro Filho, P., & Amaral, H. (2005). From Smith to Porter: an analysis of foreign trade theories . REGE Revista De Gestão, 12(4), 101-113. https://doi.org/10.5700/issn.2177-8736.rege.2005.36536
Section
Economia de Empresas