Page 38 - International Marketing

NPP

40 International Marketing BRILLIANT'S

model. This is based on the rationale that a country will specialize in and
export that product which is more intensive in that factor, which is more
abundant. It will import those goods which are more intensive in that factor
of production which is scarce in that country.
Since, countries have different factor endowments, a country would
have relative advantage in a commodity that embodies in some degree
that country's comparatively abundant factors. A country should thus export
that commodity that is relatively plentiful (i.e. in comparison to other
commodities) within the relatively abundant factor (.i.e in comparison to
other countries). These exported items can then be exchanged for goods
that would use large quantities of the country's scarce factors, if
domestically produced.
O = Ownership advantages
L = Locational advantages
I = Internalization advantages
Q = asset advantages
a
Q = transaction advantages.
t
= represents possible sequential linking
= represents interaction
1 = Transport Costs
2 = Production Costs
3 = Tariff Barriers
4 = Psychic Distance
5 = Investment Incentives
6 = Market Access
7 = Patents Trademarks
8 = Economies of Joint Supply
9 = International Arbitraging
10 Avoidance of property right infringement
11 Avoidance of buyer uncertainty
12 Price Discrimination
13 Assurances of Quality Control
14 Effective Management Control