As the industry is fast-growth industry, there will be weak than slow-growth industry because they want earn back their capital fast as possible and the profit or revenue as much as the industry can do it. The slow-growth industry will be stronger than other industries those who are
This idea mainly advocates the larger the market sold the greater the gains from trade and the division of labor. The division of labor creates conducive environment for technological innovation, because the potential return is much larger (Todaro and Smith,
How capital and labor are combined is central to how much output is produced. To increase the output with given inputs, productivity needs to increase through innovations. Innovations are often brought to the market and diffused through the economy by young entrepreneurial firms. New smaller firms often choose more risky product introduction strategies compared with more established firms. They fail more often, but they also successfully bring riskier high-impact innovations to the market more
The importance of FDI and trade openness was the notorious features trend toward globalization in recent years and has emerged as one of the talking points by the economist when explaining the growth of developing countries. As this two component is assumed to have a parallel relation, the positive trade openness contributes to nation growth by improving productivity and export capability. Trade openness also provides a greater efficiency, It is found that the countries with more openness relatively outperformed their economy than less opened countries because they indirectly promoting the FDI to their countries thus enjoying the benefits of
So, a more competitive economy is the one that is expected to grow more rapidly over the way to long term. The two dissimilar concepts of productive efficiency are: relative efficiency in manufacturing exportable goods and absolute point of production costs related to other countries. Relative efficiency doesn’t show competitiveness as a whole of different countries rather it clarify the paths of Global specialization in production whereas absolute production costs defined how successful countries are in global marketplace for individual goods [Irfan ul Haque
Economic growth is main factor in individual lifestyle in and economy so if there is growth, reduction of poor living standards will occur. These enhances consumer spending because it increases incomes. An increase in workers real wage rates will result higher purchasing power of a worker and therefore these workers who are also consumers tend to increase their spending, which causes a rise in aggregate demand and aggregate supply in a long run, because there is an increases in aggregate demand and aggregate supply over time it results to growth in output from firms and therefore firms need to employ more workers for continuous expansion and as a result reducing unemployment. A rise in output will also result to improved and more efficient public services as consumer real wage rates increases so does direct taxes, which results to growth in tax revenues government can increase spending on education and health. With all these in place firms become more confident and are able to achieve product efficiency even with even market conditions and so they invest more, and as stated in the first part of this essay investments is a main source of economic
Thus, consumerism spurs consumption. Consumerism is held as an economic ideology that enhances global development with its increasing consumption that spurs economy with greater purchasing power. It has allowed people to enjoy more access to increasing levels of disposable income. As such, consumerism stirs consumers to achieve their goals through acquisition of goods. Globalisation of commodities encourages the search for cheaper and quicker methods of disposable of both domestic and industrial waste.
The higher the firms’ fixed cost, the firm will compete to increase the profit to cover the fixed costs. For CMP, there are more similar firms within an industry will lead to the higher the rivalry among existing competitors of CMP. The threat of new entrants is high when the new competitors are easy to enter to a market while low when there are significant entry barriers. The entry barrier blocks the ability of a firm to enter an industry. The large capital investment per unit of output in facilities tends to limit industry entry.
Hong et. al (2008) Added that by entering into trade liberalization agreements, exporting industries could increase their marketing expenditure to the exporting country as they had lower tax rates to pay. Fosu (1990) found that trade agreements enabled the home country to concentrate investment on the sectors that had a higher competitive advantage. Trade liberalization has is known to bring benefits to the financial sector as well. By increasing exports, a nation is able to accumulate additional foreign exchange (Kemal et al 2002), promote additional saving and investment (Todaro, 2000) which may lead to an additional growth of exports thus creating a virtuous cycle.