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Author Question: What is the nature of the proximity-concentration tradeoff that firms have to deal with then making ... (Read 89 times)

captainjonesify

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on: Jun 30, 2018
What is the nature of the proximity-concentration tradeoff that firms have to deal with then making decisions regarding foreign direct investment?
 
  What will be an ideal response?

Question 2

Recent tests suggest that the Leontief Paradox has been completely resolved.
 
  Indicate whether the statement is true or false


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Silverbeard98

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Reply #1 on: Jun 30, 2018
Answer to Question 1

If the firm has numerous production facilities close to their various international markets, trade costs will be relatively low. However, when there are numerous production facilities, each will be relatively small, and opportunities for economies of scale will be foregone.

Answer to Question 2

FALSE
Explanation: At best, recent tests provide mixed evidence on the question and largely negative evidence on the general validity of the Heckscher-Ohlin model.


captainjonesify

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Reply 2 on: Jun 30, 2018
Gracias!

emsimon14

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Reply 3 on: Yesterday
Excellent

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