Trade Theories
The 1960s and 1980s were an example of this theory
What is mercantilism?
Taiwan’s location on the waterway that connects East Asia with the rest of the world is an example
What is natural advantage?
The factor that Taiwan was trying to influence in the period of export expansion
What is capital?
The theory that explains why there was a renewal of trade with China in the 1990s
What is country-similarity theory?
The main driver of Taiwan’s success throughout time in the Diamond of National Advantage theory
What are factor conditions?
The theory that explains why Taiwan had to increase foreign workers in the 2000s
What is factor mobility theory?
Taiwan sought this advantage through its Big Ten Constructions
What is acquired advantage?
The expulsion of the Japanese in the late 1940s was an example of this effect
What is brain drain?
The theory that explains why Taiwan moved labor-intensive manufacturing overseas in the 1990s
What is factor proportions theory?
Taiwan’s government promoted technological jobs in the 1990s
What is strategic trade policy?
The theory that explains the motivation for Taiwan’s trade policies in the 1990s
What is free trade theory?
The decision to expel the Japanese workers in the 1940s because of high unemployment was an example of this limitation of free trade theory
What is the full employment assumption?
The motivation for Southeast Asian workers to work as expatriates
What is economic motivation for migration?
The theory that explains why little Taiwan does so much international trade
What is theory of country size?
The Vietnamese and Indonesian people living and working in Taiwan
What are expatriates?
Taiwan decided to shift its production base to innovation in the 2010s. If this was about creating more reward jobs for its people, it would be a good example of this theory
What is neomercantilism?
This theory explains why, in the 1990s, Taiwan decided to invest in Chinese assembly to gain global efficiency
What is the Theory of Comparative Advantage?
The investment in The Big Ten Constructions
What are capital investments?
For example, Taiwan has significant trading relationships with China and Japan
What is an example of cultural similarity?
In the first part of the 20th century, Japan prevented Taiwan from achieving anything close to equilibrium with other countries on this
What is balance of trade?
The interplay between China and Taiwan in the 1990s is an example of this
What is complementarity of trade and factor mobility theories?
Taiwan’s current “New Southbound Policy” may be an example of an important limitation of free trade theory
What are transportation costs? OR What are static and dynamic?
The expulsion of the Japanese in the late 1940s was antithetical to this tenant of Factor Mobility Theory
What are the benefits of migration?
There were no examples of this motivation for expatriates in Taiwan in your text
What are refugees? Or What are political reasons for moving?
Even though Taiwan engages in a lot of trade as a percentage, it is not nearly as big of a trading country by dollar value
What is absolute vs relative trade difference?