The U.S. market for computers is dominated by domestic firms such as Dell, Hewlett-Packard, and Apple. The U.S. market for consumer electronics is dominated by Japanese firms and brands such as Sony, JVC, Panasonic, Mitsubishi, and Toshiba. However, the U.S. automobile market includes both strong domestic firms like Ford and General Motors and formidable Japanese competitors like Toyota and Honda.

1. Analyze each of the above-mentioned industries from the standpoint of each country-based and firm-based theory of international trade discussed in this chapter. Which theory is the best predictor and which is the worst predictor of reality for these industries?
2. Do the same theories work as well in making predictions for those industries?
3. Based on what you know about the Japanese market, decide whether the same pattern of competitiveness that exists in the United States for the computer, consumer electronics, and automobile industries also holds true for that market. Why or why not?

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A The best predictor of reality for these firms is countrybased theory and the worst is firmbased theory although they both have their advantages Anal... View the full answer