Further development of the classical theory of international trade is associated with the creation in the 20s. XX century Swedish economists Eli Heckscher and Bertil Ohlin theory of the relationship between production factors, which was most fully outlined in the latter’s book “Interregional and International Trade” (1933). This theory is based on the same premises as Smith and Ricardo's theories of absolute and comparative advantage. The main difference is that it assumes the presence of not one, but two factors of production: labor and capital. According to the views of Heckscher and Ohlin, each country is endowed with these factors of production to varying degrees, which gives rise to differences in the ratio of prices for them in countries participating in international trade. The price of capital is the interest rate, and the price of labor is wages.
Relative price level, i.e. the ratio of prices of capital and labor in countries that are more saturated with capital will be lower than in countries where there is a capital shortage and relatively large labor resources. And, conversely, the level of relative prices for labor and capital in countries with abundant labor resources will be lower than in other countries where they are scarce.
This in turn leads to differences in relative prices for the same goods, on which national comparative advantage depends. Hence, each country tends to specialize in the production of goods that require more of the factors with which it is relatively better endowed.
Factor price equalization theorem (Heckscher-Ohlin-Samuelson theorem)
Under the influence of international trade, relative prices for goods participating in global trade tend to equalize. This also leads to an equalization of the price ratio for production factors used to create these goods in different countries. The nature of this interaction was revealed by the American economist P. Samuelson, who proceeded from the basic postulates of the Heckscher-Ohlin theory. In accordance with the Heckscher-Ohlin-Samuelson theorem, the mechanism for equalizing prices for production factors is as follows. In the absence of foreign trade, prices of factors of production (wages and interest rates) will differ in both countries: the price of the surplus factor will be relatively lower, and the price of the scarce factor will be relatively higher.
Participation in international trade and the country's specialization in the production of capital-intensive goods lead to a flow of capital into export industries. The demand for a factor of production that is surplus in a given country exceeds the supply of the latter and its price (interest rate) rises. On the contrary, the demand for labor, which is a scarce factor in a given country, is relatively reduced, which leads to a decrease in its price - wages.
In another country, which is relatively better endowed with labor resources, specialization in the production of labor-intensive goods leads to a significant movement of labor resources into the corresponding export industries. An increase in the demand for labor leads to an increase in wages. The demand for capital decreases relatively, which causes a decrease in its price - the interest rate.
Leontief's paradox
In accordance with the theory of the relationship between production factors, relative differences in their endowment determine the structure of foreign trade of individual groups of countries. In countries that are relatively more capital-saturated, exports should be dominated by capital-intensive goods, and imports by labor-intensive ones. Conversely, in countries that are relatively more labor-intensive, labor-intensive goods will dominate exports and capital-intensive goods will dominate imports.
The theory of the ratio of production factors has been repeatedly subjected to empirical tests by analyzing specific statistical data in relation to various countries. At the same time, economists sought to find out the existence of a correlation between the ratio of capital- and labor-intensive sectors of the economy of individual countries and the real structure of their exports and imports.
The most famous study of this kind was carried out in 1953 by the famous American economist of Russian origin V. Leontiev. He analyzed the structure of US foreign trade in 1947 and 1951.
The US economy after World War II was characterized by high capital saturation and relatively higher wages compared to other countries. According to factor ratio theory, the United States would export predominantly capital-intensive goods and import predominantly labor-intensive goods.
V. Leontyev determined the ratio of capital and labor costs required to produce export products worth 1 million dollars and the same volume of imports. Contrary to expectations, the study showed that US imports were 30% more capital intensive than exports. This result became known as the "Leontief paradox".
There are various explanations for the Leontief paradox in the economic literature. The most convincing of them is that the United States, earlier than other industrialized countries, achieved significant advantages in the creation of new knowledge-intensive goods. Therefore, a significant place in American exports was occupied by goods in which the costs of skilled labor were relatively high, and imports were dominated by goods that required relatively large capital expenditures, including various types of raw materials.
The Leontief paradox warns against an overly straightforward and simplified use of the conclusions of the Heckscher-Ohlin theory for practical purposes.
8. Modern theories of international trade.
Modern theories of international trade
2.1. Neoclassical approaches
Heckscher-Ohlin theory. The new model was created by Swedish economists Eli Heckscher and Bertel Ohlin. Up until the 60s. The Heckscher-Ohlin model dominated the economic literature.
The essence of the neoclassical approach to international trade and specialization of individual countries is as follows. For reasons of historical and geographical nature, the distribution of material and human resources between countries is uneven, which, according to neoclassical scholars, explains differences in the relative prices of goods, on which, in turn, national comparative advantages depend. This implies the law of proportionality of factors: in an open economy, each country tends to specialize in the production of goods that require more factors with which the country is relatively better endowed. Olin formulated this law: “International exchange is the exchange of abundant factors for rare ones: a country exports goods, the production of which requires more factors that are available in abundance.”
According to the Heckscher-Ohlin theory, countries will export those goods whose production requires significant costs relative to surplus factors and import goods whose production would require intensive use of relatively scarce factors. Thus, surplus factors are exported in a hidden form and scarce ones are imported. Intensive use of a factor, for example, labor in the production of a product means that the share of labor costs in its cost is higher than in the cost of other goods (usually such a product is called labor-intensive).
The relative endowment of a country with factors of production is determined as follows: if the ratio between the amount of a given factor and other factors in the country is higher than in the rest of the world, then this factor is considered relatively redundant for a given country, and vice versa, if the specified ratio is lower than in other countries, then the factor is considered scarce.
Thus, if Russia is richly endowed with mineral resources, and Germany is richly endowed with technology and management resources for the production of mechanical products, then the structure of commodity exchange between the countries is obvious.
Practice partly confirms the conclusions of the Heckscher-Ohlin theory. But in recent decades, the structure of provision of developed countries (especially European ones) with the necessary production resources has been relatively leveled out, which, according to the Heckscher-Ohlin theory, should have reduced their incentives to trade with each other. However, this does not happen. On the contrary, the center of gravity in international trade is moving precisely to trade between industrialized countries, that is, countries with approximately the same endowment of factors of production. Moreover, the share of mutual supplies of similar industrial goods in world trade is growing. This does not fit into the Heckscher-Ohlin theory.
“Leontief Paradox.” The logical impeccability of the Heckscher-Ohlin theorem was first questioned in the late 40s by the American economist of Russian origin Vasily Leontiev. Using the inter-industry balance model he created, he studied the structure of imports and exports and came to surprising conclusions, later called the Leontief paradox.
V. Leontiev showed that in 1947 the United States, considered a capital-surplus country, exported not capital-intensive, but labor-intensive products, although, according to the Heckscher-Ohlin theory, the result should have been the opposite. In the course of his research, Leontiev wanted to simultaneously test two assumptions:
1) the Heckscher-Ohlin theory is valid;
2) the US economy was widely believed to have more excess capital than its trading partners.
Leontief obtained the ratio of the size of fixed capital and the number of workers in the export and import-substituting industries of the United States in 1947. This required calculations of capital and employment not only in several dozen industries under consideration, but also accounting for the capital and labor that were contained in their goods as a result of using the products of others industries. Being one of the pioneers of the input-output balance, he successfully used its capabilities to obtain the necessary estimates of the capital-labor ratio, multiplying the coefficient matrices by the vectors of capital and labor costs, the cost of exports and imports by industry. The paradoxical results obtained by Leontiev puzzled not only himself, but also other economists: it turned out that in 1947 the United States was selling labor-intensive goods to other countries in exchange for relatively capital-intensive ones. The key parameter was only 0.77, whereas, according to the Heckscher-Ohlin theory, it should have exceeded unity.
Subsequently, Leontiev’s calculations were repeated both by the author himself and by other researchers, and the results refuting the theorem were confirmed both for the USA and for other countries. The most serious test was undertaken in 1987 with the help of modern computer technology by the Americans G. Bowen, E. Leamer, L. Sveiskaus, who made calculations for 27 countries for 12 factors of production. The results were discouraging: for 2/3 of the factors of production, trade based on them corresponded to the Heckscher-Ohlin theorem in less than 70% of cases.
Explanations of the Leontief paradox come down to the following provisions proposed both by the author himself and his critics:
1) differentiation of production factors: it is necessary to take into account the quality and heterogeneity of such aggregated factors of production as labor and capital, in particular, it is necessary to divide the labor force into low- and highly skilled. The United States and other highly developed countries export such labor-intensive products, which are dominated by highly skilled labor. Accordingly, developed countries can import capital-intensive products produced using traditional low-tech types of capital;
1) there is reversibility of factors of production. The same product can be labor-intensive in a labor-abundant country and capital-intensive in a capital-abundant country. For example, rice produced in the capital-abundant country of the United States is a capital-intensive good because it is produced using advanced technology. The same rice produced in labor-abundant and capital-insufficient Vietnam cannot but be labor-intensive, because... made almost by hand. The reversibility of factors of production was first proven by the American economist B. Minhas in the early 60s.
Numerous studies in this direction have led to two main results: 1) they confirmed the presence of the “paradox” throughout most of the post-war period; 2) significantly improved our understanding of the availability of factors and the intensity of their use. The first refuted the Heckscher-Ohlin theory, the second supported it.
Thus, the result of the discussion around the “Leontief paradox” was a tendency towards decoupling factors of production and taking into account each of the subtypes when explaining the directions of export and import flows. As individual factors that can provide relative advantages to industries or firms, they began to single out, for example, labor of various qualifications, the quality of management personnel, various categories of scientific personnel, various types of capital, etc.
2.2. Neotechnological approaches
In recent decades, many facts of international trade do not fit into the schemes of classical and neoclassical theories. Among the qualitative changes in international trade, it should be noted that there is not an increase in trade between developing and developed countries, which should mutually enrich both, according to classical theories, but an increase in trade between the developed countries themselves, with a decrease in the share of exchanges between developed and developed countries in international trade. developing.
Another fact of modern world trade that cannot be explained from a neoclassical position is the sharp increase in world trade turnover attributable to intra-company trade. Deliveries of products between divisions of modern transnational corporations (TNCs) located in different parts of the world are international trade in form, but in content they are fundamentally different from the export-import operations of independent states as subjects of foreign economic relations. Intracompany trade within TNCs is carried out at transfer prices, which may deviate significantly from market prices depending on the interests of the TNC management company. Attempts to explain new phenomena in world trade have led to the emergence of the following theories.
According to the technology gap theory, trade between countries occurs even with the same endowment of factors of production and can be caused by technical changes arising in one industry in one of the trading countries, due to the fact that technical innovations initially appear in one country, the latter gains an advantage: new technology makes it possible to produce goods at lower costs. If the innovation consists in the production of a new product, then the entrepreneur in the innovating country for a certain time has a so-called “quasi-monopoly”, in other words, receives additional profit by exporting the new product. Hence the new optimal strategy: to release not what is relatively cheaper, but what no one else can produce yet, but is necessary for everyone or many. As soon as others can master this technology, they will produce something new and again something that is inaccessible to others.
As a result of the emergence of technical innovations, a “technological gap” is formed between countries that have and do not possess these innovations. This gap will gradually be overcome, because other countries begin to copy the innovation of the innovating country. However, until the gap is closed, trade in new goods produced using new technology will continue.
The “product life cycle” theory is the most popular neo-technological theory. It has attracted almost all economists, since it more accurately reflects the real state of the international division of labor in the modern period.
The product life cycle covers four stages - introduction, growth, maturity and decline. At the first stage, new products are developed in response, as a rule, to an emerging need within the country. Therefore, production is small-scale, the product is consumed mainly in the domestic market and only a small part of it goes to the foreign market. At the next stage, the demand for the product grows and its production expands and gradually spreads to other developed countries. This stage of maturity is characterized by large-scale production, and the price factor becomes predominant in competition. At the same time, the technology for producing the product begins to move to less developed countries, which, due to the low cost of production factors, gradually concentrate the main output of this product, meeting the needs of the entire world market, including the pioneer country in the production of this product.
This theory quite realistically reflects the evolution of many industries, but is not a universal explanation of trends in the development of international trade. If research and development and advanced technology are no longer the primary determinant of competitive advantage, product production will indeed shift to countries that have a comparative advantage in other factors, such as cheap labor. The rise of the consumer electronics industries in Southeast Asia perfectly illustrates the product life cycle theory. However, there are many products (with a short life cycle, high transportation costs, with significant opportunities for differentiation in quality, a narrow circle of potential consumers, etc.) that do not fit into this theory. For example, the production of supercomputers, nuclear reactors, and high-tech weapons is still concentrated in well-known countries that have unique advantages for their production.
Michael Porter's theory: the theory of competitive advantage.M. Porter believes that the theories of D. Ricardo and Heckscher-Ohlin have already played a positive role in explaining the structure of foreign trade, but in recent decades they have actually lost their practical significance, since the dependence of the competitiveness of industries on the availability of basic factors of production in the country has been significantly eliminated. M. Porter identifies the following determinants that form the environment in which the competitive advantages of industries and firms develop:
1) factors of production of a certain quantity and quality;
2) conditions of domestic demand for the products of this industry, its quantitative and qualitative parameters;
3) the presence of related and supporting industries that are competitive in the world market;
4) strategy and structure of firms, the nature of competition in the domestic market.
The named determinants of competitive advantage form a system, mutually reinforcing and conditioning each other’s development. To these are added two more factors that can seriously influence the situation in the country: government actions and random events. All of the listed characteristics of the economic environment in which competitive industries can be formed are considered in dynamics, as a flexible development system.
The state plays an important role in the process of forming specific advantages of sectors of the national economy, although this role is different at different stages of this process. These may include targeted investment, export promotion, direct regulation of capital flows, temporary protection of domestic production and stimulation of competition in the early stages; indirect regulation through the tax system, development of market infrastructure, information base for business in general, financing of scientific research, support of educational institutions, etc. Experience shows that in no country has the creation of competitive industries been possible without the participation of the state in one form or another. This is all the more relevant for transitional economic systems, since the relative weakness of the private sector does not allow it to independently form the necessary factors of competitive advantage and gain a place in the world market in a short time.
The theory of production specialization. In the early 80s of the XX century. American economists P. Krugman and K. Lancaster proposed an alternative explanation to the classical explanation of the causes of international trade. Why Japan has concentrated the world production of civil ships, the USA provides 2/3 of the world with civil aircraft and almost the entire world with supercomputers, Germany confidently occupied the world market of machine tools and luxury cars. Why is competition between these countries in these markets not becoming fierce?
According to this approach, countries with similar factor endowments will be able to gain the most from trade with each other if they specialize in different industries characterized by economies of scale. The essence of this effect, well known from microeconomic theory, is that with a certain technology and organization of production, long-term average costs are reduced as the volume of output increases, i.e. there are economies of scale due to mass production. Therefore, it is profitable for the United States to buy cheap televisions and VCRs from Japan, reducing its own production of these goods to zero, offering to the Japanese market airplanes and supercomputers, which the land of the rising sun also does not produce at all.
In order for the effect of mass production to be realized, a sufficiently capacious market is obviously necessary. International trade plays a decisive role in this, since it allows the formation of a single integrated market, more capacious than the market of any individual country. As a result, consumers are offered more products at lower prices.
At the same time, the implementation of economies of scale leads to concentration and monopolization of production, which destroys competition in international trade. The structure of markets is changing. They become either oligopolistic with a predominance of inter-industry trade in homogeneous products, or markets of monopolistic competition with developed intra-industry trade in differentiated products. In this case, international trade is increasingly concentrated in the hands of giant international firms - TNCs, which inevitably leads to an increase in the volume of intra-firm trade, the directions of which are determined by the strategic goals of the firms themselves, and not by the principles of comparative advantage or differences in the endowment of production factors.
The theory of foreign trade activities of firms . In this theory, the object of analysis is not an individual country, but an international company. The objective basis of this approach is the fact generally recognized by economic science: a significant part of foreign trade transactions actually represents intra-company exchange: intra-company relations currently account for about 70% of all world trade in goods and services, 80-90% of sold licenses and patents, 40% of capital exports .
Intra-company trade is based on the exchange of semi-finished products and spare parts used in the assembly of a product intended for sale on the world market. At the same time, foreign trade statistics indicate that foreign trade is rapidly expanding between countries where the largest transnational corporations are located.
Note that there are other theories of international trade , however, all of them, including those discussed above, require further development and adaptation to the dynamically changing conditions of modern international trade.
3. Current trends and prospects for the development of trade and economic relations of the Russian Federation
Trade and economic relations of Russia in modern conditions are a reflection of the ongoing reform of Russia’s foreign economic relations, its goals, priorities, and consequences. Russia is pursuing a multi-vector foreign policy aimed at ensuring the country’s worthy place in global and regional processes.
Currently, as Russia overcomes the consequences of the socio-economic crisis, it is consistently increasing its foreign economic activity. Russia's ongoing trade policy is focused on ensuring international support for its reforms and creating favorable conditions for the country's trade and economic relations. In these conditions, Russia's foreign trade is designed to stimulate economic growth, expand production in competitive industries beyond national needs, help attract foreign investment to the domestic market, as well as the introduction of the latest equipment and technologies.
One of the most important conditions for increasing the efficiency of Russia’s foreign economic relations is the active search for alternative areas of trade and economic cooperation and the involvement of new counterparties in the orbit of business interaction. Considering the geography of Russia's foreign trade, it should be noted that in modern conditions it has more than 200 trade and economic partners. At the same time, European countries account for more than 65% of foreign trade turnover, 23% for Asian countries, 10% for American countries and 1.2% for countries in Africa, Australia and Oceania.
The development of the Russian economy is impossible without its consistent integration into the system of international economic relations. To date, an open market economy has generally formed in Russia, and Russian enterprises have largely mastered the practice of carrying out foreign economic transactions in an open economy.
In the field of development of legislation and application of trade policy instruments, a system for regulating foreign trade in goods has been created, based on the following principles:
Liberalization of foreign trade activities by expanding the number of its participants;
Reduction of administrative methods of regulation for the main product range of Russian exports and imports;
Using predominantly economic methods of regulation, such as customs tariffs, internal taxes, regulation of the exchange rate of the national monetary currency.
In the field of trade and political relations, the prerequisites have been formed for a gradual transition from exclusively bilateral to multilateral interaction. Expanding the circle of trading partners and searching for new markets for goods and services necessitate intensifying government participation in international and regional associations and organizations, which, in turn, predetermines the need for qualitative improvement and intensification of cooperation in the field of customs. Currently, the customs system and the activities of the customs area are being modernized and improved.
In conditions of increasing external openness of the national economy, the requirements for the implementation of a unified state trade policy aimed at increasing the efficiency of the functioning of the foreign economic complex and strengthening its competitiveness are intensifying. In addition, additional measures are needed to overcome discriminatory restrictions on Russian exports and ensure effective protection of the domestic market from unfair foreign competition.
The level of international competitiveness of the Russian economy remains low. In combination with the technical backwardness of enterprises and the insufficient development of institutions of the Russian economy, this is manifested in the weak diversification of foreign economic activities of Russian companies, in terms of both product and industry structure, and the geography of export flows. The consequence of this is a high dependence on conditions in world markets, including energy resources, and limited opportunities for promoting domestic goods and services to foreign markets, as well as the impossibility of ensuring wide access and rational use of resources within the global economy. Thus, the stability of Russian business is sharply reduced.
The most important unresolved problems in the field of foreign economic policy are:
The traditional weakly diversified nature of exports over the past 25 - 30 years with its high dependence on the price situation in a limited number of unstable commodity markets;
The mechanisms and organizational forms of participation of Russian enterprises in the international division of labor do not sufficiently use modern opportunities associated with the division of production factors;
In the area of application of trade policy instruments, issues related to low levels of transparency and high costs remain unresolved, primarily in the field of customs administration.
The intensification of Russia's participation in international trade and economic relations, as well as the solution of these tasks, will be facilitated by accession to the World Trade Organization, an increase in the influx of foreign direct investment, primarily in sectors of the Russian economy that are experiencing a shortage, diversification of markets, industries and forms of participation of Russian business in MRI system. In this regard, it is necessary to highlight the strategic directions for the development of trade and economic relations in Russia (Fig. 1 of the Appendix).
Diversification of the commodity and sectoral structure of trade and the development of modern mechanisms for the participation of Russian enterprises in the system of modern international trade are the most important factor in increasing not only the competitiveness, but also the stability of Russia’s foreign economic relations and should become one of the means of maintaining their stability in the event of a decline in prices on world markets for raw materials and fuel.
An important area of export diversification should be the development of exports of services, primarily transport services, and in particular in the field of transit (including land and air transportation).
Expanding the circle of participants in foreign trade operations and diversifying the range of exports of goods and services should be facilitated by measures related to the inclusion of small businesses in international economic relations. This should be facilitated both by measures related to the development of infrastructure in the field of exports in general, and by targeted assistance in increasing the competitiveness of small businesses.
Legal and institutional support for Russia's participation in the international division of labor and factors of production primarily involves ensuring Russia's equal position within the international trading system and the possibility of using its potential for the effective participation of the Russian economy in the system of international trade in goods and services.
A key element in creating favorable trade and political conditions for the development of trade in goods, services and investment is the completion of the process of joining the multilateral regulatory system on terms acceptable to Russia. This will make it possible to make a transition from a bilateral legal framework for trade to a multilateral one, which is fundamental for most countries in the world and determines the development of international trade (indirectly, this step can also help improve the investment climate).
Improving the use of instruments for protecting the domestic market is the most important condition for preventing or eliminating adverse consequences associated with distortions of the competitive environment or the use of unfair competition methods in international trade, as well as a means of regulating the conditions of access to the domestic market, taking into account trade and political conditions and structural features of the national economy. The importance of improving the quality of work in this area is determined by the need to ensure the compatibility of legislation and practice with internationally recognized norms and rules.
The most important direction in this area is the expansion of the effective application of existing legislation in the field of anti-dumping, countervailing and protective measures, which will require appropriate staffing.
The development of infrastructure for the integration of Russian enterprises into international trade and the movement of production factors is an important prerequisite for the successful development of trade and investment and a factor in increasing competitiveness. Among the areas related to entrepreneurial activity, the following can be distinguished:
Development of infrastructure elements in the field of transport, telecommunications, access to information resources;
Development of business cooperation mechanisms in the form of exporter associations (especially with the participation of small businesses), which could provide consultations, legal assistance, facilitate participation in exhibitions, advertise, etc.;
Development of the market for services related to export activities.
The development of legislation in the field of electronic commerce (improving legislation on electronic digital signatures) can also contribute to increasing the competitiveness of Russian enterprises.
The most important prerequisite for the use and development of competitive advantages and available resources in international trade is the development of education, training and retraining of personnel in the field of trade policy and international business. The main areas of training are: the application of trade policy instruments, the application of measures to protect the internal market, and the resolution of trade disputes.
Expanding the circle of trading partners and searching for new markets for goods and services will require the development of bilateral relations and increased participation of Russia in regional trade and political blocs. Participation in integration processes and liberalization of trade and movement of production factors within regional associations is the most important factor in the development of foreign economic relations and increasing competitiveness within the world market.
The diversification of the geographical structure of exports and the development of new markets within the framework of bilateral relations will also contribute to increasing Russia’s competitiveness within the global market (Fig. 2 of the Appendix).
Improving the system for regulating trade in goods, services and international investment on an autonomous basis will improve the practice of applying measures in the field of regulating trade in goods and services, taking into account the specifics of the development of Russian foreign economic relations and legislation.
One of the directions in this area will be the improvement of measures in the field of regulation of the movement of goods across the customs border by individuals in the direction of further streamlining and reducing unorganized trade.
Thus, the main directions for the development of trade and economic relations in Russia are currently very diverse; their implementation in the future is intended to further strengthen foreign trade partnerships and cooperation with foreign countries.
Conclusion
The development and complexity of international trade is reflected in the evolution of theories explaining the driving forces of this process. Modern theories of international trade either develop the principles of classical theories, extending them to a larger number of goods, countries and factors of production, or study certain aspects of international trade that for some reason remained unexplained by classical theories. One group of newer theories looks at international trade primarily from the supply side of goods. Another group of theories completely rejects the classical theories, declaring them obsolete, and offers its own explanation of international trade. This group of theories usually focuses on the analysis of supply and demand for goods in international trade.
The development of D. Ricardo's theory of comparative advantage went in several directions: the most popular was the Heckscher-Ohlin theory of the ratio of production factors, which substantiated the need to determine comparative advantage in foreign trade based on the assessment of production factors, their ratios and interrelationships. These theories belong to the group of the latest theories of the neoclassical school. At the present stage, the neoclassical school coexists with the neotechnological school, which has been developed since the mid-twentieth century on the basis of scientific and technological revolution.
The neotechnological school associates the main advantages with the monopoly position of the innovating company (and country). Hence the new optimal strategy for individual firms: to produce not what is relatively cheaper, but what is needed by everyone or many, but which no one else can produce yet. The attitude towards the state has also changed: neo-technological economists believe that the state can and should support the production of high-tech export goods and not interfere with the curtailment of production of other, outdated ones.
In historical terms, one cannot help but note the growing influence of Asian countries on world trade processes; it is likely that in the new millennium this region will take leading roles in the global process of production and sale of goods.
Using the example of Russia, it can be noted that the country is a huge market for goods, services and capital. However, the degree to which this potential is realized in the foreign economic sphere is very modest.
But if Russia’s role in world trade is small, then for Russia itself the importance of the foreign economic sphere is very significant. Foreign trade remains an important source of investment goods, and also plays a large role in supplying the Russian population with food and various goods.
International, or foreign, trade occupies a special place in the complex system of the world economy. Although in modern conditions the leading form of international economic relations is not the export of goods, but foreign investment, international trade in its scope and functions remains extremely important. It mediates almost all types of cooperation, including joint production activities of multinational entities, international technology transfer, etc. Both historically and logically, the internationalization of economic life always began with the sphere of commodity circulation.
9. International services market
The emergence of a mature international goods market and its saturation led to an increase in demand for services, which caused the intensive development of the international services market.
A service is an action of a certain consumer value, expressed in a useful effect, which, as a rule, satisfies one or another human need at the moment of its manifestation. In this case, the service can be provided either in kind, i.e. with the help of a thing (product), or in the process of functioning of living labor itself.
Two ways of producing services also determine two types of services themselves. The first type of services are those services that are mediated by things and deal with consumer goods. The provision of services of this kind is no different in content from the labor process in material production. All five elements of labor are present here: means of labor, subject of labor, technology, organization and labor itself as a purposeful human activity. This gives grounds to call such services material (production).
The second type of services are services whose action is directed either directly to a person or to the conditions surrounding him. Services of this type are not related to material products; their production is inseparable from consumption. The creation of these services coincides with their consumption. Services of this type are intangible (non-productive).
The procedure for foreign trade in services in the Russian Federation was established by letter of the Ministry of Foreign Economic Relations of Russia dated January 5, 1995 No. 10-112/35 (Appendix 3).
International trade in services compared to trade in goods has the following features:
It is regulated not at the border, but within the country by the relevant provisions of domestic legislation. The absence or presence of the fact that a service crosses the border cannot be a criterion for the export of a service (as well as the currency in which this service is paid for);
Services are not subject to storage. They are produced and consumed at the same time.
Therefore, most types of services are based on direct contracts between their producers and consumers;
The production and sale of services have greater state protection than the sphere of material production and trade. Transport, communications, financial and insurance services, science, education, healthcare in many countries are fully or partially owned by the state or under its strict control;
International trade in services is closely related to and has a strong impact on trade in goods. For example, the impact of services on trade in knowledge-intensive goods, which requires large amounts of technical maintenance, information and various consulting services, is great;
Not all types of services, unlike goods, can be traded. Services that come primarily for personal consumption cannot be involved in international economic turnover. Tourism, healthcare, education, culture and art have great prospects in international trade in services.
In conditions of fairly dense saturation of the international market with a mass of goods and increased competition on it, services for entrepreneurship, namely management, audit, engineering, accounting, leasing, franchising, etc., have become important.
The modern international services market provides a wide range of services to assist in administrative activities (management), which is especially common in the case of the construction of industrial and other turnkey facilities, when it is necessary to provide enterprises with specialists for a long time.
The subject of export-import operations is also the purchase and sale of the results of intellectual activity: licenses, know-how, patents, computer programs, etc. In this case, transactions are concluded both for the buyer to acquire the right to use individual inventions, and for their joint introduction into production with the subsequent mutually beneficial sale of the products.
Without transfer of title, ownership is carried out in a row, i.e. a transaction to perform certain work on the instructions of the customer. The subject of the contract is usually geological exploration, design and survey, construction and installation work, reconstruction and modernization of industrial and other facilities.
The customer can enter into an agreement with one counterparty, who organizes participation in the work of other subcontractor firms, or enter into such relationships with several counterparties to perform various types of work. To implement particularly large projects, firms unite into consortia.
A consortium is a temporary association of independent business entities for the joint implementation of a certain commercial operation.
An export consortium is a foreign trade association created to facilitate the export operations of its member enterprises. The main services of the export consortium are: organizing the participation of enterprises in exhibitions and fairs; sending enterprise representatives abroad; advertising and study of foreign markets; insurance and export credit financing; search for external partners; drawing up contract documentation and translating it into foreign languages; centralization of communication systems (for example, provision of telex and e-mail), etc.
Contracting is also widely used in R&D and engineering consulting activities.
Regular contracting relationships quite often turn into sustainable production, scientific and technical cooperation, and the creation of joint ventures.
International production cooperation between business entities most often develops on the basis of a systematic exchange of raw materials, materials, equipment, software, and specialists.
10. The essence and types of trade policy. Free trade and protectionism.
Analysis of theories of international trade made it possible to answer the question of why countries trade with each other. No less important is the question of what policies individual countries pursue in the field of international trade.
A policy in which the state refrains from direct intervention in foreign trade, allowing it to develop under the influence of the free forces of supply and demand, is traditionally called free trade policy (free trade). Such a policy best meets the interests of any country, allowing to maximize the volume of output from each of the trading countries.
The policy of protecting the national market from foreign competition through the use of customs tariffs and non-tariff methods of regulation is called protectionism.
One of the central problems of international trade is the debate between supporters of free trade and protectionism about the appropriateness of this or that policy. Supporters of both free trade and protectionism put forward a number of arguments to justify their position.
The argumentation of free trade is based on the general theoretical thesis that thanks to free trade, based on comparison of national production costs, the world economy can achieve a more rational allocation of resources and a higher standard of living. The structure of resources and production technology in each country are different, which determines differences in the national costs of production of different resources and products, causing their specialization in the system of international division of labor into those that are less expensive and of higher quality. Hence, any intervention in the spontaneously developing exchange of goods between states seems economically harmful.
In addition, the following arguments are put forward in favor of free trade:
The protectionist argument contains the following provisions:
The development of protectionist trends allows us to distinguish several forms of protectionism:
In fact, to this day the centuries-old dilemma of which is better - free trade or protectionism - has not been completely resolved. In the practice of international trade, there has never been absolutely free trade and, apparently, there cannot be, since the governments of all countries introduce certain restrictions on the movement of international flows of goods and services.
Protectionism is stronger in developing countries and countries with economies in transition than in the industrialized countries of the world. The dominant trend is still towards liberalization of foreign trade relations.
Classic protectionism and neo-protectionism in the form of non-tariff methods of influencing international trade processes are expensive methods of maintaining the self-sufficiency of the national economy. In the 1980s, according to World Bank estimates, the cost of protectionist measures for the American consumer was estimated: for cars - $1 billion, for clothing - from $8.5 to $12 billion; for the countries of the European Community (for clothing) - from 1.4 to 6.6 billion dollars per year. This did not prevent, however, the United States in the 1990s. engage in trade wars and impose protectionist restrictions, for example on steel imports from Russia.
By the beginning of the 1990s. only 20% of the world exchange of goods and services met the requirements of GATT, that is, they were carried out according to the rules of free trade. 1/4 of the total trade volume was carried out under protectionist mechanisms, 1/4 was the share of transnational corporations, 1/4 was the share of compensatory trade.
The share of protectionism and free trade in the volume of world trade shows their relatively equal ratio, but the opposition between supporters does not stop.
Free trade is a policy of non-interference by the state in international trade (free trade). In this case, the latter is implemented and developed in accordance with the international division of labor and the modern version of the theory of comparative advantage. Such policies are believed to lead to the most efficient allocation of resources on a global scale and to the maximization of global income. Despite the fact that the theory of free trade is quite convincing and attracts many advantages, the policy of non-interference of the state in international trade is practiced very carefully.
Since free trade is the opposite of orthodox protectionism, all its positive aspects act as critics of protectionism. The positive effects of free trade are that it:
Stimulates competition processes both among domestic producers and in the global market as a whole;
Allows for international trade in accordance with the law of comparative competitive advantage;
Creates the opportunity to use international specialization, which is the basis for profit growth for both producers and consumers;
Promotes expansion of market boundaries: creates the basis for mass production and obtaining a positive effect from it.
Proponents of free trade believe that the arguments in favor of protectionism are debatable, since the goals that it sets for itself can be achieved at lower costs.
The predecessor of free trade in the 20th century. became the “new economic order”, which was proposed in the form of international trade and economic relations of the United States as the leading power in the world, emerging from World War II even richer and more prosperous than before. At that time, the “New Economic Order” was the basis for realizing the interests of the United States and its TNCs in relations with less developed countries.
The modern French economist M. Pebro gives a classic definition of free trade: “This is the most favorable rule of the game for a leading economy.” Countries that have a serious gap in the levels of technological structures will not be able to become full-fledged, equal partners. Free trade will manifest itself for countries with a lower technical and technological structure as the law of commodity exchange (the law of value), according to which a developed country always receives an incomparably more significant benefit from exchange than a poor one. “Blind application of the principle of free trade would lead to the subordination of the weak to the strong, to the emergence of an objective situation of economic colonialism, unbearable for countries,” concludes M. Pebro.
Developed Western countries, which have strong positions in world markets, are interested in Russia's foreign trade policy being pursued in the spirit of free trade, since this creates unconditional unilateral advantages for them. Recognizing certain positive aspects of free trade, it should be noted that such a policy should be pragmatic, and protectionism should stimulate the national entrepreneur.
An example is the development path that developed countries have gone through.
In the period after the industrial revolution, when England was the technical leader, the “factory of the world,” the USA and Germany developed under the pressure of English industry and were suppliers of raw materials (USA - cotton, Germany - bread), as well as buyers of English industrial goods. To get rid of economic dependence, these countries took the path of protectionism, which created the conditions for strengthening their national industry. In a short period, restrictions and even a break in traditional economic ties occurred. However, having strengthened national industry and subordinated the domestic market to their influence, American and German capital enter the international market and enjoy the benefits of international labor development as leading partners.
The existence of directly opposite approaches to foreign trade policy and equivalent theoretical justification indicate their equivalence and the futility of absolutizing each of them. It is obvious that strict application of the principles of free trade by developing countries would call into question the possibility of industrialization processes in these countries.
The most developed countries take a position of pragmatism in each specific case. Recognizing the value of free trade and being the author of the theory of absolute advantage, A. Smith, however, believed that it was necessary to avoid excessive saturation of the national market with foreign goods, which would exacerbate the employment problem. J. Mill, who substantiated the theory of international value, recommended providing a certain level of protection to developing countries and emerging industries. Such positions are supported by many developing countries on the threshold of the 21st century.
In contrast to the WTO, which sets goals for further trade liberalization, developing countries consider this task premature, believing it necessary to focus on analyzing the implementation of existing agreements. This is most relevant for them, as developing countries increasingly report difficulties they face in implementing agreements. They are dissatisfied with the formal approach of industrialized countries to the implementation of agreements reached to expand access of foreign goods to their markets.
Developing countries say they continue to face serious difficulties in exporting their agricultural, fishing, light and electronics products to Western countries. We are talking about subsidies to national producers of agricultural products, tariff and non-tariff barriers, as well as anti-dumping measures. Developing countries are not satisfied with the concept of anti-dumping measures, which the WTO implements in its policies.
The leader of the world economy, the United States actively demonstrates its commitment to liberal approaches and free trade, which, however, does not prevent it from more actively promoting the development of national American industry, strengthening scientific and technical potential and achieved leadership.
Each country in any specific situation needs to find a balance, a balance between naive free trade and blind protectionism, optimal compliance with national short-term, tactical and long-term, strategic national interests. The resolution of this contradiction in the long term is seen as a tendency to liberalize international trade, a search for an economic compromise that would lay the foundation for the further development of processes of taking into account and respecting mutual national interests.
The increasing interdependence of all components of international economic relations poses the problem of coordinating economic policy and forming a new international economic order.
The international economic order, based on the liberalism of international trade, has been taking shape as a trend in further relations between states since the mid-20th century. In this regard, international economic organizations and agreements that facilitate the search for resolving contradictions and achieving compromise solutions between states on economic issues are becoming increasingly important.
Such organizations and agreements either have a wide range of activities or specialize in specific issues.
One of the main agreements, the special purpose of which is to accelerate the international market process and develop international trade, is GATT - the General Agreement on Tariffs and Trade. It was signed in Geneva in 1947 by 23 countries and came into force in 1948. This document established the principles of non-discrimination and liberalization of international trade conditions. All contracting parties were granted most favored nation treatment in trade. Reasonable, cautious protectionism was allowed only in the form of customs tariffs; import quotas were prohibited.
By 1996, approximately 130 countries were members of the GATT. Since January 1996, GATT has been replaced by the World Trade Organization (WTO). The formation of the WTO reflects the specifics of the current stage of development of international trade. The scope of WTO regulation now extends to the international exchange of services and intellectual property, control and protection of investments. Since the World Trade Organization is the successor to the GATT, membership in the WTO means automatic acceptance by a member state in full of the entire package of agreements already concluded within the GATT.
Of particular importance in modern conditions is the system formed in the second half of the 20th century. transnational capital, owned by TNCs (transnational corporations), dictating its own rules of the game in international economic relations. By the beginning of the 21st century. a situation is emerging where national states do not have sufficient power for large-scale financial interventions to counter speculative transnational capital. If previously the state could, with the help of financial control and legislative acts, regulate the national market of currency and goods, implementing foreign economic policy in the national interests, then under the conditions of liberalization of financial markets and easing of foreign exchange controls, transnational capital is not limited in any way in its actions. He had the opportunity to bring down the financial markets of any state at any time, no matter what foreign trade policy it pursued.
Having critically analyzed the classical theory of comparative advantage in such conditions, the French economist and 1998 Nobel Prize laureate Maurice Allais came to the conclusion that free trade on a global scale can only have negative consequences. Proponents of classical analysis assume that comparative costs are constant, although they change over time, especially in industrial production. In addition, the analysis usually compares two hypothetical situations: one under conditions of complete autarky, the other under conditions of free trade, and ignores the presence of a transition period, which is associated with certain difficulties and costs in the transition from one situation to another . The law of comparative costs relies on differences in the productivity levels of factors of production, which in real life can be compensated by the policy of changing exchange rates.
So, complete trade liberalization, which is the goal of the WTO, is unrealistic and undesirable, says Maurice Allais. He considers progress along this path suicidal and proposes to decisively abandon the principles underlying modern international exchange. “Today the world is at a historically important turning point, when the ultimate goal of social life should be recognized not as the development of trade exchange as such, but to achieve the happiness of people. The perversions of socialism caused the collapse of society in Eastern European countries, let us be vigilant so that the perversions of liberalism do not cause the collapse of Western societies,” urges Maurice Allais.
Any extremes are equally dangerous for citizens of any country or group of countries. Blind and rigid protectionism is as absurd as the danger of being left unarmed in the face of dogmatic and unrestricted free trade.
11. Non-tariff methods of regulating international trade.
In addition to tariff methods of state regulation of international trade, governments actively use non-tariff methods - quantitative, hidden and financial. Most of them, unlike customs tariffs, are poorly quantifiable and therefore poorly reflected in statistics.
A. Quantitative restrictions
1. Import-export quotas - establishing restrictions on the import or export of goods in quantitative or value terms.
According to the direction of action, quotas are:
A) Export - introduced either in accordance with international stabilization agreements, establishing the share of each country in the total export of a certain product (for example, oil exports from OPEC countries), or by the government of the country to prevent the export of goods that are in short supply on the domestic market (for example, oil exports from Russian Federation or sugar from Ukraine in the early 90s);
B) Imported - introduced by the national government to protect local producers, achieve a balanced trade balance, regulate supply and demand in the domestic market, and also as a response to the discriminatory trade policies of other countries (for example, the United States imposed a quota of 5.7 million liters on the import of milk and sour cream from New Zealand; 104 thousand kg for the import of ice cream from the Netherlands; 3.4 million kg for the import of Swiss cheese from Switzerland).
2. Licensing – regulation of foreign trade activities through permits issued by government bodies for the export or import of goods in specified quantities for a certain period of time.
The mechanisms for distributing licenses are very diverse:
A) Auction - sale of licenses on a competitive basis - the most market-based method;
B) System of explicit preferences - the government assigns licenses to certain firms in proportion to the size of their imports;
C) License allocation on a non-price basis - the government issuing licenses to those firms that have demonstrated their ability to import or export in the most efficient manner.
3. “Voluntary” export restrictions - a quantitative restriction on exports based on the commitment of one of the trading partners to limit or at least not expand the volume of exports, adopted as part of a formal intergovernmental or informal agreement on establishing quotas for the export of goods (for example, Japan “ voluntarily" limits its exports of cars and steel to the USA, televisions to the UK, Belgium, the Netherlands and Luxembourg).
B. Hidden methods of trade policy
Factor intensity- an indicator that determines the relative costs of a business enterprise to create a certain product.
Factor saturation is an indicator that determines. Relative endowment of the country with FP.
Theory of comparative advantage:
If countries specialize in the production of those goods that they can produce at relatively lower costs compared to other countries, then trade will be mutually beneficial for both countries, regardless of whether production in one is absolutely more efficient than in the other. Based on the theory of comparative advantage, Mill derived law of international value.
Heckscher-Ohlin theory:
Two-factor model: capital and labor until the 60s of the 20th century.
H.-O.'s theorem: a country chooses the direction of export production based on the use of a saturated resource, and the direction for import becomes production involving the use of a rarer resource.
Owners of relatively abundant factors of production benefit from trade, while owners of relatively scarce factors of production lose.
Another conclusion from the Heckscher-Ohlin theory, which was made by the American economist Paul Samuelson, is that the movement of factors of production between countries leads to equalization of prices, or more precisely, to an equalization of the ratio of prices for these factors in different countries. This conclusion is often called the Heckscher-Ohlin-Samuelson theorem.
Leontief's paradox - the theory of the relationship between production factors by H.-O. is not confirmed in practice: labor-saturated countries export capital-intensive products, while capital-saturated countries export labor-intensive products.
Alternative theories of international trade. The theory of specific factors of production. Stolper-Samuelson theorem. Rybczynski's theorem. Trading based on economies of scale. Trade under conditions of monopolistic competition.
1). The theory of specific factors of production.
A country produces two goods using three factors of production: labor, land and capital. Labor is a mobile factor within the country, used to produce the first and second goods. Capital is a specific factor for the first commodity, land - for the second commodity.
A specific factor is a factor of production that is characteristic only of a given industry and which cannot move between industries.
Theory of specific factors of production - international trade is based on differences in the relative prices of goods that arise due to different endowments of countries with specific factors of production, with factors specific to export raw materials developing, and factors competing with imports declining.
This theory is based on the law of diminishing returns - with the quantity of other factors of production remaining constant, the marginal product of labor decreases upon reaching a certain volume of production.
Marginal labor productivity is the amount of increase in total income resulting from the use of an additional unit of labor. The marginal productivity of labor decreases, that is, the more labor costs increase, the lower its marginal productivity becomes.
For the model of specific factors of production, it is important to distinguish between constant returns (labor increased by one unit and output also increased by one) and diminishing returns (an increase in labor input per unit also leads to an increase in production, but by less than one).
Based on the information, it is possible to determine a production possibilities curve for the economy of a country as a whole that produces only two goods, showing in what proportion good 1 and good 2 will be produced given different proportions of labor input, assuming that capital and land are constant.
Since in the model of specific factors of production labor is mobile, its price, that is, wages, in different industries will be equal, therefore, it is possible to construct a graph for the distribution of labor between the production of 1 product and 2 goods.
2). Stolper-Samuelson theorem. Wolfgang F. Stolper and Paul Samuelson have shown that, under certain conditions, foreign trade does indeed divide society into net gainers and net losers. Prerequisites: A country produces two goods (eg, wheat and cloth) using two factors of production (eg, land and labor); neither commodity is used to produce another; there is absolute competition; the supply of factors is given; for the production of one of the goods (wheat), land is intensively used, and the second (cloth) is labor-intensive both in terms of foreign trade and without it; both factors can move between sectors (but not between countries); the establishment of trade relations leads to an increase in the relative price of wheat. Stolper-Samuelson theorem: under the above premises, the establishment of trade relations and free trade inevitably lead to an increase in the remuneration of a factor intensively used in the production of a good, the price of which is rising (land), and a decrease in the remuneration of a factor intensively used in the production of a good, the price of which falls (labor), regardless of what the structure of consumption of these goods is by the owners of production factors. The merit of Stolper and Samuelson is not only that they strictly, and not with the help of individual examples, proved this consequence, but also that they showed that the result does not depend at all on what goods are purchased for personal consumption by the families of landowners and workers. This conclusion contradicted the intuitive idea of many economists that if workers spent a significant part of their income on cloth, then its cheaper price as a result of foreign Trade would still lead to an increase in their real income. The theorem showed that this does not happen. Why is explained in the generalization of the Stolper-Samuelson theorem, carried out in 1965 by Ronald Jones. Within the framework of this model, there is a magnification effect: a 10% increase in the relative price of one of the goods (for example, wheat) causes an even greater (in percentage terms) increase in the remuneration of the intensively used factor (land) in terms of cloth, and to a reduction in the remuneration of the other factor (labor), so that the purchasing power of labor in relation to cloth decreases, despite the cheapening of the latter. Thus, as a result, the change in the ratio between the remuneration of factors increases in comparison with the change in the ratio of the prices of cloth and wheat that determined it. Consequently, wage rates are reduced in terms of both wheat and grain.
3). Rybczynski's theorem.
English economist of Polish origin T.M. Rybchinsky clarified the conclusions of the Heckscher-Ohlin theory of the ratio of production factors.
He proved the theorem according to which, given constant world prices and the presence of only two sectors in the economy, the expansion of the use of excess factor in one of them leads to a reduction in production and output of goods in the other. Let's consider Rybczynski's theorem using a specific example.
Rice. 34.7. The impact of increased use of a production factor on income from it
Let us assume that the country produces two goods: X and Y using two factors of production - capital and labor (Fig. 34.7). Moreover, product X is relatively more labor-intensive, and product Y is relatively more capital-intensive. Vector OF shows the optimal combination of labor and capital based on the use of the most efficient technology in the production of goods X, and vector OE - respectively, in the production of goods Y. The provision of the country as a whole with labor resources and capital is shown by point G, meaning that the country has OJ labor and GJ capital. In the absence of foreign trade, product X is produced in volume F, and product Y is produced in volume E.
With the inclusion of a country in international trade exchange, the production of goods Y in the export sector increases, the creation of which uses the excess factor - capital - to a greater extent. This leads to an increase in the capital used by GG 1 With the size of the other factor used - labor - unchanged, the ratio of the production of goods X and Y is shown by the parameters of the new parallelogram. The production of the exported capital-intensive good Y will move to point E 1, i.e. will increase by EE 1. On the contrary, the production of a more labor-intensive good X will move to point F 1, i.e. will decrease by FF 1 . Moreover, the movement of capital into the export-oriented sector leads to a disproportionate increase in the production of product Y.
4). Trading based on economies of scale.
In the early 80s of the XX century. American economists P. Krugman and K. Lancaster proposed an alternative explanation to the classical explanation of the causes of international trade. According to their approach, countries with similar factor endowments will be able to gain the maximum benefit from trade with each other if they specialize in different industries characterized by economies of scale. The essence of this effect, well known from microeconomic theory, is that with a certain technology and organization of production, long-term average costs are reduced as the volume of output increases, i.e. there are economies of scale due to mass production.
In order for the effect of mass production to be realized, a sufficiently capacious market is obviously necessary. International trade plays a decisive role in this, since it allows the formation of a single integrated market, more capacious than the market of any individual country. As a result, consumers are offered more products at lower prices.
In the absence of trade, if each country wanted to have both planes and ships, it would have to produce them in small quantities at inefficient points like B (for the USA) and E (for Japan). Both production possibility curves in this case are concave, reflecting economies of scale.
As follows from the graphical model, when moving along the US production possibilities curve from point B to point A (increasing production volumes in aircraft manufacturing and reducing ship production), the costs for each aircraft in terms of ships that have to be abandoned become less and less (curve becomes steeper). This can (presumably) occur as a result of the fact that in aircraft manufacturing production is carried out on a cost-effective scale, and in shipbuilding it is the opposite, and that with each unfinished ship more and more resources are released. The same reasoning holds for Japan's production possibilities curve. Here, as in D. Ricardo’s model with non-increasing costs, countries have an incentive to complete specialization: for the USA this is point A, for Japan - D.
It should also be noted that the implementation of economies of scale, as a rule, leads to a violation of the principles of perfect competition, since it is associated with the concentration of production and the consolidation of firms that turn into monopolists. The structure of markets changes accordingly. They become either oligopolistic with a predominance of inter-industry trade in homogeneous products, or markets of monopolistic competition with developed intra-industry trade in differentiated products. In this case, international trade is increasingly concentrated in the hands of giant international firms, transnational corporations (TNCs), which inevitably leads to an increase in the volume of intra-company trade, the directions of which are often determined not by the principles of comparative advantage or differences in the availability of factors of production, but by the strategic goals of the firms themselves - TNK.
5). Trade under conditions of monopolistic competition.
In order to understand the impact of monopolistic competition on international trade, it is necessary to first identify three basic relationships between the number of firms and the price of their goods:
The relationship between the number of firms and the average cost of a typical firm - the more firms, the smaller the production volume of each firm, the higher the average cost per unit of goods;
The relationship between the number of firms and the price at which each of them sells goods - the more firms, the higher the competition and the lower the prices;
the relationship between the price at which firms sell goods and their quantity on the market - if the price exceeds the market average, then an additional number of firms appear on the market, and if the price is lower than the market average, then the number of firms decreases.
Within the framework of the monopolistic competition model, the first two relationships are the most important. International trade increases the size of the sales market. The relationship between the number of firms in the market and the average production costs per firm is expressed by the following linear equation: average costs, fixed costs that do not depend on the size of the firm's production, marginal costs of the firm.
This is a kind of supply equation in an oligopoly market. It shows that as a firm's output X increases, its average cost decreases because fixed costs are divided by more goods produced. In a state of market equilibrium, all firms should receive an equal price for their products, that is, P = P. But in this case, the market equilibrium equation takes on the simplified form X = S/n. Substituting it instead of X on the left side of the equation, we get its right side, which says that the more firms there are in the industry, the higher the average costs of each of them. An increase in sales S per firm as a result of an increase in the market with the development of trade and with a constant number of firms operating in this market n leads to a reduction in average costs c of each of them.
The relationship between the number of firms in a market and the price at which they sell their products follows from the basic market equilibrium equation. Multiplying the expression in square brackets by 5, we get:
X=S--Sbp+Sbp=Ј+Sbp)-Sbp.
The inverse relationship between sales and price, as is known from macroeconomics, is expressed by a simple linear equation:
where A is a constant, and B is a coefficient showing the inclination of the straight line relative to the horizontal axis. It is easy to see that the equation actually has the form of an equation, where the expression in parentheses represents the constant A, and (5 x b) is the coefficient B.
The formula for the marginal revenue (MR) of a firm, known from the general theory of economics, is as follows:
MR = Р- = Р- = с.
In the formula, the coefficient B is replaced by (5x b) and it is assumed that to maximize profits, the firm sets its marginal revenues equal to its marginal costs (c). Transforming this equation, we get the price at which the company sells its goods:
Р=с+£.
But, as noted above, X = S/n. Therefore, the required ratio between the number of firms and the price at which each of them will sell their goods will be:
This is a kind of demand equation in an oligopoly market. As you can see, the more firms there are, the higher the competition and the lower the prices. It is also important that the sales parameter does not enter into the equation, which means that market size does not affect the relationship between the number of firms and the price at which each of them sells the product.
So, trade between countries that are identical or very similar in their endowment of factors of production is explained by the specialization of countries in certain goods due not to comparative advantage, but to economies of scale, which is a development of production in which an increase in the cost of factors per unit leads to an increase in production of more , than by one. External economies of scale mean that the number of firms producing the same product increases while the size of each remains the same, resulting in perfect competition. Internal economies of scale mean that the volume of production of a good remains the same, but the number of firms producing it decreases. Internal economies of scale lead to imperfect competition (pure monopoly in the extreme case), in which producers can influence the price of their goods and increase sales by lowering prices. The model of trade under monopolistic competition assumes that international trade increases the size of the market. When two countries trade with each other, the total market is larger than the simple sum of the two countries' markets, the number of firms, and thus the variety of goods they produce, increases, and the unit price of the good decreases.
Alternative theories of international trade. Intra-industry trade. Inter-industry trade. The theory of intersecting demand. Reverse of production factors (reverse of production factors, reverse of demand). On one's own. (Kireev, part 1).
1).Intersecting demand theory
One of the first attempts to explain the features of modern international trade was made in 1961. Stefan B. Linder in his work “An Essay on Trade and Transformation”. He created the Theory of Overlapping Demand: since consumers in countries with approximately the same income level have approximately similar tastes, it is easier for each country to export those goods that it has accumulated a lot of experience in producing and trading in the domestic market. This theory explains international trade not from the supply side of goods, but from the demand side.
2). Reversal of factors of production: the same product can be labor-intensive in a labor-abundant country and capital-intensive in a capital-abundant country, which can happen under conditions of high elasticity of interchangeability factors of production. For example, rice produced in the capital-abundant country of the United States is a capital-intensive good because it is produced using advanced technology. The same rice produced in the labor-abundant country of Vietnam is a labor-intensive commodity because it is produced almost exclusively using manual labor.
3). Intra-industry trade is the exchange between countries of differentiated products of the same industry. Interindustry trade is the exchange between countries of homogeneous products from various industries. Intra-industry trade in differentiated goods is explained by: differences in the tastes of consumers who want to have more choice within one product group; intersecting demand, according to Linder's hypothesis. Since consumers in countries with approximately the same income level have similar tastes, it is easier for each country to export those goods in the production and trade of which it has accumulated extensive experience in the domestic market; effect of scale. This explains the development of the theory of intra-industry trade.
Further development of the classical theory of international trade is associated with the creation in the 20s. XX century Swedish economists Eli Heckscher and Bertil Ohlin theory of the relationship between production factors, which was most fully outlined in the latter’s book “Interregional and International Trade” (1933). This theory is based on the same premises as Smith and Ricardo's theories of absolute and comparative advantage. The main difference is that it assumes the presence of not one, but two factors of production: labor and capital. According to the views of Heckscher and Ohlin, each country is endowed with these factors of production to varying degrees, which gives rise to differences in the ratio of prices for them in countries participating in international trade. The price of capital is the interest rate, and the price of labor is wages.
Relative price level, i.e. the ratio of prices of capital and labor in countries that are more saturated with capital will be lower than in countries where there is a capital shortage and relatively large labor resources. And, conversely, the level of relative prices for labor and capital in countries with abundant labor resources will be lower than in other countries where they are scarce.
This in turn leads to differences in relative prices for the same goods, on which national comparative advantage depends. Hence, each country tends to specialize in the production of goods that require more of the factors with which it is relatively better endowed.
Under the influence of international trade, relative prices for goods participating in global trade tend to equalize. This also leads to an equalization of the price ratio for production factors used to create these goods in different countries. The nature of this interaction was revealed by the American economist P. Samuelson, who proceeded from the basic postulates of the Heckscher-Ohlin theory. In accordance with the Heckscher-Ohlin-Samuelson theorem, the mechanism for equalizing prices for production factors is as follows. In the absence of foreign trade, the prices of factors of production (wages and interest rates) will differ in both countries: the price of the surplus factor will be relatively lower, and the price of the scarce factor will be relatively higher.
Participation in international trade and the country's specialization in the production of capital-intensive goods lead to a flow of capital into export industries. The demand for a factor of production that is surplus in a given country exceeds the supply of the latter and its price (interest rate) rises. On the contrary, the demand for labor, which is a scarce factor in a given country, is relatively reduced, which leads to a decrease in its price—wages.
In another country, which is relatively better endowed with labor resources, specialization in the production of labor-intensive goods leads to a significant movement of labor resources into the corresponding export industries. An increase in the demand for labor leads to an increase in wages. The demand for capital decreases relatively, which causes a decrease in its price—the interest rate.
There is theoretical evidence that the Ricardian model also works in the case of many goods, as well as when taking into account transport costs. Thus, the theory of comparative advantage recommends that a country import those goods whose production costs in that country, compared to other goods, are higher than the goods it exports.
As can be seen from the above example, the international specialization of countries on the basis of comparative advantages contributes to saving labor resources in these countries while maintaining the same volume (or even increasing) the consumption of goods in them.
In the 30s XX century Swedish economists Eli Heckscher and Bertel Ohlin created their model of international trade. By this time, great changes had occurred in the system of international division of labor and international trade. The role of natural differences as a factor in international specialization has noticeably decreased, and industrial goods have begun to dominate in the exports of developed countries. The Heckscher-Ohlin model aims to explain the causes of international trade in manufactured goods.
1) in the production of various goods, factors are used in different proportions;
2) the relative provision of countries with factors of production is unequal.
This implies the law of proportionality of factors: in an open economy, each country tends to specialize in the production of goods that require more factors with which the country is relatively better endowed. International exchange is the exchange of abundant factors for scarce ones.
Thus, surplus factors are exported in a hidden form and scarce factors of production are imported, i.e. the movement of goods from country to country compensates for the low mobility of production factors on the scale of the world economy.
In the process of international trade, the prices of production factors are equalized. Initially, the price of a factor available in excess will be relatively low. Excess capital leads to specialization in the production of capital-intensive goods and the flow of capital into export industries. The demand for capital increases, therefore the price of capital increases.
If there is an abundance of labor in a country, then labor-intensive goods are exported. The price of labor (wages) also increases.
The theory of comparative advantage was further developed in the works of Swedish economists E. Heckscher and B. Ohlin in the 20s and 30s. XX century The theory of comparative advantage, although it proves that international tourism is beneficial to all countries, does not explain how these advantages arise. The Heckscher-Ohlin theory distinguishes countries according to their different saturation with production factors. It is “differences in the rarity of factors of production in different countries,” says E. Heckscher, “that are a necessary condition ... for international trade.” B. Olin supports his position: “Inequality in the supply of factors of production creates the need for international trade...”
According to E. Heckscher and B. Ohlin, a comparative assessment of factors predetermines three significant circumstances:
1) countries participating in international exchange have a tendency to export those goods and services for the production of which predominantly production factors that are in abundance are used, and, conversely, to import those products for which there is a shortage of some factors;
2) the development of international trade leads to the equalization of “factor” prices, i.e. income received by the owner of this factor (the Heckscher-Ohlin-Samuelson theorem);
3) with sufficient international mobility of factors of production, it is possible to replace the export of goods and services by moving the factors themselves between countries.
The abundance of some factors of production makes them cheaper compared to others that are missing, and since the production of any tourism service requires a combination of factors, a tourism service produced using cheaper excess factors will be relatively cheaper not only in the domestic market of this country, but and on the outside. As a result, this tourism service will have a comparative advantage. Thus, the country exports those tourism services, the provision of which is based on factors of production that are surplus to it, and imports services for the production of which it is endowed with factors of production that are much worse. Countries specialize in the production and sale of tourism services in which they have an advantage and which cost them less. For example, resorts in Spain, Greece, Tunisia and Morocco attract a large flow of tourists due to their favorable climate and excellent sea beaches.
Despite the fact that the Heckscher-Ohlin theory is shared by most modern specialists, it has a limited scope.
The famous economist V. Leontiev in the mid-1950s. made an attempt to empirically test the main conclusions of the Heckscher-Ohlin theory and came to a paradoxical conclusion. Using an input-output balance model based on US economic development data for 1947, he showed that American exports were dominated by relatively more labor-intensive goods, while imports were dominated by capital-intensive ones. Given that in the early post-war years in the United States, unlike most of its trading partners, capital was a relatively abundant factor of production and wages were significantly higher, according to the Heckscher-Ohlin theory, the United States would export capital-intensive goods and import - labor-intensive.
Thus, the empirically obtained result clearly contradicted what the Heckscher-Ohlin theory assumed, and therefore received the name “Leontief paradox.” Subsequent studies confirmed the presence of this paradox in the post-war period not only for the United States, but also for other countries (Japan, India, etc.).
Numerous attempts to explain this paradox have made it possible to develop and enrich the Heckscher-Ohlin theory by taking into account additional circumstances affecting the international specialization of countries, among which the following can be noted:
Heterogeneity of production factors, primarily labor, which can vary significantly in skill level. As a result, the exports of industrialized countries may reflect a relative redundancy not of labor in general, but of highly skilled labor, while developing countries export products that require significant labor inputs of unskilled workers. We can say that in the case of Leontief’s paradox, very unique “labor-intensive” goods were exported from the United States, the production of which used labor that absorbed large costs of “human capital”;
. significant role of natural resources, which can participate in production processes only in association with a large amount of capital. This goes some way to explaining why exports from many resource-rich developing countries are capital-intensive, even though capital in these countries is not a relatively abundant factor of production;
. the influence on international specialization of policies pursued by the state, which can limit imports and stimulate domestic production and exports of products or services in those industries where relatively scarce factors of production are intensively used.
Practice has shown that the Heckscher-Ohlin theory is in most cases applicable in the economic analysis of tourism. Three groups of factors can be distinguished to ensure the country’s comparative advantage in international tourism activities: 1) natural resources, historical and cultural heritage; 2) capital; 3) labor resources. The specialization of international tourism, however, does not mean that countries with extensive tourism resources work exclusively on receiving tourists. For example, many industrialized countries, such as the USA, Great Britain, Germany, Canada, France, pursue an active policy in both receiving and sending tourists.
The competitiveness of many countries in the field of international tourism is directly related to the availability of natural resources, which include land, seas, lakes, rivers, landscape, climate, flora and fauna. They characterize the location of the country and are decisive for the formation of tourist flows. Thus, the presence of excellent sea beaches and a warm climate in Mediterranean countries encourage tourists from such tourist-developed countries as Austria, Great Britain, Germany, Switzerland, and Japan to visit these resorts. The Spaniards, Greeks, and Israelis satisfy their demand for winter skiing, for example, at ski resorts in Switzerland, Austria, Italy, France, and Slovenia. An important motive for the arrival of foreign tourists is the historical and cultural heritage of the country. Cities known all over the world for their architecture, culture, and history include Paris, Rome, Venice, St. Petersburg, etc.
The cost of natural resources and historical and cultural monuments depends on their availability and quality characteristics. Consequently, depending on the degree of accessibility of these resources and the possibility of their exploitation for tourism purposes, they acquire economic importance. The importance of these factors in ensuring the country's competitiveness can be traced using statistical data on the distribution of travel purposes of Japanese tourists (the Japanese are considered one of the most traveling nations in the world).
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