Some economists have brought attention to the importance of the role of geography in international trade. One

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Some economists have brought attention to the importance of the role of geography in international trade. One example of this is the dramatic rise in trade between the United States and Mexico. This increase is attributed primarily to wage differences between the two countries and the proximity, with both countries sharing a joint border over 2,000 miles in length. Geographic proximity allows for the relative cheap movement of goods by train from the heart of Mexico to any corner of the United States within three to four days. On the other hand, advocates of globalization claim that the role of geography in international trade is limited and is declining constantly. They contend that direct transportation costs as a percentage of the total value of the goods for most goods is low and is declining. Furthermore, it is not actual transportation costs, but the coordination of managerial resources and information that is the key to savings through global logistics. This reduces the role of geography in international trade to a minimal level. Comment on the two views.

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Global Marketing Management

ISBN: 978-1119398332

7th edition

Authors: Masaaki Kotabe, Kristiaan Helsen

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