经贸英语汇.pptVIP

The theory suggests that early in a products life-cycle all the parts and labor associated with that product come from the area in which it was invented. After the product becomes adopted and used in the world markets, production gradually moves away from the point of origin. In some situations, the product becomes an item that is imported by its original country of invention. There are four stages in a products life cycle. The location of production depends on the stage of the cycle. Stage 1: Introduction: New products are introduced to meet local (i.e., national) needs, and new products are first exported to similar countries, countries with similar needs, preferences, and incomes. Stage 2: Growth: A copy product is produced elsewhere and introduced in the home country (and elsewhere) to capture growth in the home market. This moves production to other countries, usually on the basis of cost of production. Stage 3: Maturity: The industry contracts and concentrates -- the lowest cost producer wins here. Stage 4: Decline: Poor countries constitute the only markets for the product. Therefore almost all declining products are produced in LDCs. New Trade Theory (NTT) is the economic critique of international free trade from the perspective of increasing returns to scale and the network effect. New Trade theorists challenge the assumption of diminishing returns to scale, and some argue that using protectionist measures to build up a huge industrial base in certain industries will then allow those sectors to dominate the world market. Although there was nothing particularly new about the idea of protecting infant industries (an idea offered in theory since the 18th century, and in trade policy since the 1880s), what was new in New Trade Theory was the rigour of the mathematical economics used to model the increasing returns to scale, and especially the use of the network effect to argue that the formation of important industries was path dependent in a way