The course seeks to introduce the student to the international economy, trade and investment theories and to the institutional arrangements governing international investment and trade. The focus is on conceptual perspectives that could help managers understand the international economy. The course is meant for practical managers and policy makers who desire deeper and fundamental understanding of the international political and economic environment. The course covers perspectives from economics, strategy, international relations and sociology.


Contents in Brief


  • Core theories of international trade – comparative advantage, the infant industry argument, optimal tariffs. Effective protection rates. Gravity models of trade. Trade blocks and unions. Trade policies.
  • The technology factor in international trade.
  • Foreign direct investment and the multinational corporation. Core theories underlying international investment. The advantage concept, product and industry cycle theories. The OLI Framework. Various parities.
  • Capital market theories of foreign direct investments (FDI) and portfolio flows. Multinationals from emerging economies.
  • WTO, the negotiation process, reciprocity, the notion of MFN, TRIMS, TRIPs. Dispute Settlement under WTO. Social and environmental clauses.
  • Dynamic comparative advantage. Export led growth (ELG). Multinationals from emerging economies. Late industrialisation and emerging economies. Macroeconomics of ELG. Aggressive exchange rates as growth strategy. Rapid economic transformation.
  • Culture (Country of origin factors) in competitiveness
  • China’s rise in the world economy. The space for China in the world economy.
  • Network effects, clusters and innovative IT industries.

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