Competitive Advantage

Competitive advantage in Global Commerce Policy

In this regard, competitive advantage is: a contentious theory of industrial development popularized by Michael Porter and others in the Competitive Advantage of Nations. The origins of the theory itself appear to go back to the economist Alfred Marshall (1842-1924). The entries on trade policy are here. It states that the success of a firm or an industry is based on cost advantages in the production of a relatively standardized product or product-based advantages related to the development of differentiated products. Firms with a competitive advantage are often concentrated geographically, which in turn assists the development of a workforce with the relevant skills. Critics of this theory have noted that through its emphasis on high-technology firms in advanced countries, and its devaluation of the importance of comparative costs, it appears to give legitimacy to public expenditure and protection policies designed to promote the premature development of high-technology industries. See also comparative advantage and strategic trade theory.[1]

Competitive advantagein the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Competitive advantage” entry (OAS)

See Also