Theories to explain national trade patterns - With whom do countries trade?
3 important questions on Theories to explain national trade patterns - With whom do countries trade?
What is the country similarity theory?
Companies create new products in response to market conditions in their home market. They then turn to markets they see most similar to the home market.
Why is product differentiation important?
Product differentiation causes countries to conduct two-way trade in seemingly similar products.
Trading partners are affcted by:
- Cultural similarity
- Political relations between countries
- Distance
- Political relations between countries
- Distance
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