Advertisement

The Nature of International Competition Among Firms

  • Yoshinori ShiozawaEmail author
  • Takahiro Fujimoto
Chapter
  • 314 Downloads
Part of the Evolutionary Economics and Social Complexity Science book series (EESCS, volume 12)

Abstract

International competition among firms and units of a multinational enterprise is a game with wage rates as handicaps. This simple truth is commonly known among managers of firms competing in the international arena. Although it is instinctively trivial and evident, this image of international competition is quite different from the traditional comparative advantage argument. Supporting the new view requires a new theory. Sections 2, 3, 4, 5, and 6 are an introduction to the new theory of international values. The second part of the chapter (Sects. 7, 8, and 9) offers some preliminary remarks on how to use it. The third part (Sects. 10, 11, and 12) is a demonstration of how the new theory can be used to analyze international competition among firms. The last part (Sects. 13 and 14) illustrates how the new theory can be applied to a more realistic situation and provides some remarks regarding the wider scope of application of the new theory.

References

  1. Akamatsu K (1962) A historical pattern of economic growth in developing countries. Dev Econ 1:3–25CrossRefGoogle Scholar
  2. Althusser L (1965) Sur la dialectique matérialiste, Dans Lous Althusser, Pour Marx. François Maspéro, Paris. Repropduit en 1996 avec un avant-propos d’ Etinenne Balibar, La Decouverte, Paris. English edition: Althusser L (1969) For Marx (trans: Brewster B). Verso, LondonGoogle Scholar
  3. Armington PS (1969) A theory of demand for products distinguished by place of production. IMF Staff Pap 16:159–176CrossRefGoogle Scholar
  4. Arrow KJ (1962) The economic implications of learning by doing. Rev Econ Stud 29:155–173CrossRefGoogle Scholar
  5. Berge C (1971) Principles of combinatorics. Academic Press, New YorkGoogle Scholar
  6. Blonigen BA, Wilson WW (1999) Explaining Armington: what determines substitutability between home and foreign goods? Can J Econ/Rev Can d’Econ 32(1):1–21CrossRefGoogle Scholar
  7. Boston Consulting Group (1968) Perspectives on experience. Boston Consulting Group Inc., BostonGoogle Scholar
  8. Chipman JS (1965) A survey of the theory of international trade: part I the classical theory. Econometrica 33(3):477–519CrossRefGoogle Scholar
  9. David PA (2001) Path dependence, its critics and the quest for ‘historical economics’. In: Garrouste P, Ioannides S (eds) Evolution and path dependence in economic ideas: past and present. Edward Elgar, Cheltenham, pp 15–40Google Scholar
  10. Deardorff AV (2005) Ricardian comparative advantage with intermediate inputs. N A J Econ Fin 16(1):11–34CrossRefGoogle Scholar
  11. Dorbusch R et al (1977) Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods. Am Econ Rev 67(5):823–839Google Scholar
  12. Dosi G et al (1990) The economics of technical change and international trade. New York University Press, New YorkGoogle Scholar
  13. Faccarello G (2017) A calm investigation into Mr Rciardo’s principles of international trade. In: Senga et al (eds) Ricardo and international trade. Routledge, Abingdon, pp 85–119CrossRefGoogle Scholar
  14. Freeman C (1997) The economics of technical change. In: Archibugi D, Michie J (eds) (1998) Trade, growth and technical change. Cambridge University Press, CambridgeGoogle Scholar
  15. Fujimoto T (1999) The evolution of a manufacturing system at Toyota. Oxford University Press, New YorkGoogle Scholar
  16. Fujimoto T (2007) Architecture-based comparative advantage: a design information view of manufacturing. Evol Inst Econ Rev 4(1):55–112CrossRefGoogle Scholar
  17. Fujimoto T (2011) Keizai Kyoshitsu (Economics classroom). The Nikkei, March 29, 2011Google Scholar
  18. Fujimoto T (2012a) Evolution of firms and industries. Evol Inst Econ Rev 9(1):1–10CrossRefGoogle Scholar
  19. Fujimoto T (2012b) Kyōsōryoku Kōchiku no tame no Genka Keisan Shiron: Sekkei Jōhō Tensharon ni motozuku Zenbu Chokusetsu Genka Keisan no Kanōsei (A preliminary note on harmonizing manufacturing (Monozukuri) management and cost accounting: a possibility of full-and-direct costing based on design-information theory of manufacturing). MMRC Discussion Paper Series no. 410Google Scholar
  20. Fujimoto T (2017) An architectural analysis of green vehicles – possibilities of technological, architectural and firm diversity. Int J Automot Technol Manag 17(2):123–150Google Scholar
  21. Fujimoto T (2018a) A design-information-flow view of industries, firms, and sites. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 5–41CrossRefGoogle Scholar
  22. Fujimoto T (2018b) Capability building and demand creation in “Genba-Oriented Firms”. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 123–154CrossRefGoogle Scholar
  23. Fujimoto T (2018c) Evolution of organizational capabilities in manufacturing-the case of the Toyota Motor Corporation. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 191–221CrossRefGoogle Scholar
  24. Fujimoto T, Ikuine F (2018) Evolution of industries and firms — Capability building and demand creation. Spinger, SingaporeGoogle Scholar
  25. Fujimoto T, Shiozawa Y (2011–12) Inter and intra company competition in the age of global competition: a micro and macro interpretation of Ricardian trade theory. Evol Inst Econ Rev 8(1):1–37, 8(2):193–231CrossRefGoogle Scholar
  26. Graham FD (1923) The theory of international values re-examined. Q J Econ 38(1):54–86CrossRefGoogle Scholar
  27. Graham FD (1932) The theory of international values re-examined. Q J Econ 46(4):581–616CrossRefGoogle Scholar
  28. Graham FD (1948) The theory of international values. Princeton University Press, PrincetonGoogle Scholar
  29. Haberler G (1936) The theory of international trade. William Hodge, Edinburgh. Originally published in German, 1933Google Scholar
  30. Ikuine F (2018a) Creating new demand: the impact of competition, the formation of submarkets and platforms. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 317–331Google Scholar
  31. Ikuine F (2018b) Decline in demand creation: the development productivity dilemma and its consequences. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 333–347CrossRefGoogle Scholar
  32. Jones RW (1961) Comparative advantage and the theory of tariffs: a multi-country, multi-commodity model. Rev Econ Stud 28(3):161–175CrossRefGoogle Scholar
  33. Jones RW (2000) Globalization and the theory of input trade. MIT Press, Cambridge, MAGoogle Scholar
  34. Jones RW, Kierzkowski H (1990) The role of services in production and international trade: a theoretical framework. In: Jones RW, Krueger AO (eds) The political economy of international trade. Basil Blackwell, OxfordGoogle Scholar
  35. Jones R, Kierzkowski H (2001) A framework for fragmentation. In: Arndt S, Kierzkowski H (ed) Fragmentation: new production patterns in the world economy and international trade. Oxford University Press, Oxford, Chapter 2, pp 17–34Google Scholar
  36. Kinoshita E (2003) Waga Kōseki: Kokusai Keizaron Tankyū no Tabi (My wake: a journey in pursuit of international economics). Tohoku Daigaku Shuppankai, SendaiGoogle Scholar
  37. Krugman P (1979) A model of innovation, technology transfer and the world distribution of income. J Polit Econ 87(2):253–266CrossRefGoogle Scholar
  38. Krugman P (1991) History versus expectations. Q J Econ 106(2):651–667CrossRefGoogle Scholar
  39. Krugman P, Obstfeld M (2009) International economics: theory and policy, 8th edn. Pearson as Addison-Wesley, New YorkGoogle Scholar
  40. Linder SB (1961) An essay on trade and transformation. Almqvist & Wiksells, StockholmGoogle Scholar
  41. Malerba F et al (2016) Innovation and the evolution of industries: history-friendly models. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  42. Maneschi A (2004) The true meaning of David Ricardo’s four magic numbers. J Int Econ 62(2):433–443CrossRefGoogle Scholar
  43. Marshall A (1879) The pure theory of foreign trade. Privately published and circulated by SidgwickGoogle Scholar
  44. McKenzie L (1953) Specialization and efficiency in world production. Rev Econ Stud 21(3):165–180CrossRefGoogle Scholar
  45. Mill JS (1844) Essays on some unsettled questions of political economy. John W. Parker, London. See in particular: Essay I of the laws of interchange between nations, and the distribution of the gains of commerce among the countries of the commercial worldGoogle Scholar
  46. Mill JS (1848) Principles of political economy with some of their applications to social philosophy. John W. Parker, London. See in particular: III.XVIII of international valuesGoogle Scholar
  47. Ogawa T (2017) Analysis of production-efficient patterns of specialization allowing intermediates inputs: the meaning of Shiozawa’s model from the viewpoint of modern economics. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 123–148CrossRefGoogle Scholar
  48. Ohno T (1978) Toyota seisan hōshiki (The Toyota production system). Daiyamondo-sha, TokyoGoogle Scholar
  49. Ohlin B (1933) Interregional and international trade. Harvard University Press, Cambridge, MAGoogle Scholar
  50. Oka T (2017) The relation between value and demand in the new theory of international values. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 99–121CrossRefGoogle Scholar
  51. Pasinetti L (1993) Structural economic dynamics: a theory of the economic consequences of human learning. Cambridge University Press, CambridgeCrossRefGoogle Scholar
  52. Petri PA (1980) A Ricardian model of market sharing. J Int Econ 10(2):201–211CrossRefGoogle Scholar
  53. Pullen J (2006) Did Ricardo really have a law of comparative advantage: a comparison of Ricardo’s Version and the modern version. Hist Econ Rev 44(1):59–75CrossRefGoogle Scholar
  54. Ricardo D (1951[1817–21]) On the principles of political economy and taxation. Edited by P. Sraffa, Volume 1 of The works and correspondence of David Ricardo. Cambridge University Press, Cambridge. https://books.google.co.jp/books/about/On_the_Principles_of_Political_Economy_a.html?id=cUBKAAAAYAAJ&redir_esc=y
  55. Ruffin R (2002) David Ricardo’s discovery of comparative advantage. Hist Polit Econ 34(4):727–748CrossRefGoogle Scholar
  56. Sato H (2017) An overview of research into international values in Japan. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 281–303CrossRefGoogle Scholar
  57. Shiozawa Y (1990) Shakai no Gijutsuteki Nōryoku: Seiteki Gainen to Dōteki Gainen (Technical capability of the society: static and dynamic concepts). In: Nakaoka T (ed) Gijutsu Keisei no Kokusai Hikaku (International comparison of technology formation: social capability for industrialization). Chikuma Shobo, Tokyo, pp 333–361Google Scholar
  58. Shiozawa Y (2007) A new construction of Ricardian Trade Theory – a many-country, many-commodity case with intermediate goods and choice of production techniques. Evol Inst Econ Rev 3(2):141–187CrossRefGoogle Scholar
  59. Shiozawa Y (2014) Rikādo Bōeki Mondai no Saishū Kaiketsu (A final solution of Ricardo problem on international values). Iwanami Shoten, TokyoGoogle Scholar
  60. Shiozawa Y (2015) International trade theory and exotic algebra. Evol Inst Econ Rev 12(1):177–212CrossRefGoogle Scholar
  61. Shiozawa Y (2016) The revival of the classical theory of values. In: Yokokawa et al (eds) The rejuvenation of political economy. Routledge, Abingdon UK, pp 151–172Google Scholar
  62. Shiozawa Y (2017a) The new theory of international values: an overview. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 3–73CrossRefGoogle Scholar
  63. Shiozawa Y (2017b) An origin of the Neoclassical Revolution: Mill’s “Reversion” and its consequences. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 191–241CrossRefGoogle Scholar
  64. Shiozawa Y (2017c) On Ricardo’s two rectification problems. In: Senga et al (eds) Ricardo and international trade. Routledge, Abingdon, pp 195–215CrossRefGoogle Scholar
  65. Shiozawa Y, Morioka M, Taniguchi K (in press) Microfoundations of evolutionary economics. Springer, SingaporeGoogle Scholar
  66. Tabuchi T (2017a) Comparative advantage in the light of the old value theories. In: Shiozawa et al (eds) A new construction of Ricardian theory of international values. Springer Nature, Singapore, pp 265–280CrossRefGoogle Scholar
  67. Tabuchi T (2017b) Yukizawa’s interpretation of Ricardo’s ‘Theory of Comparative Costs’. In: Senga et al (eds) Ricardo and international trade. Routledge, Abingdon, pp 48–59CrossRefGoogle Scholar
  68. Tatsumoto H (2018) Evolution of business ecosystems. In: Fujimoto T, Ikuine F (eds) Industrial competitiveness and design evolution, Evolutionary economics and social complexity science, vol 12. Springer, Tokyo, pp 155–188CrossRefGoogle Scholar
  69. Teece DJ, Pisano G (1994) The dynamic capability of firms: an introduction. Ind Corp Chang 3(3):537–556CrossRefGoogle Scholar
  70. Vernon R (1966) International investment and international trade in the product cycle. Q J Econ 80(2):190–207CrossRefGoogle Scholar
  71. Viner J (1937) Studies in the theory of international trade. Harper, New YorkGoogle Scholar

Copyright information

© Springer Japan KK, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Osaka City UniversityOsakaJapan
  2. 2.Graduate School of EconomicsThe University of TokyoBunkyo-KuJapan

Personalised recommendations