Economics Comparative Advantage Questions
Export-oriented industrialization refers to a strategy adopted by countries to promote economic growth by focusing on producing goods and services that they have a comparative advantage in and exporting them to international markets.
The concept of comparative advantage plays a crucial role in export-oriented industrialization. Comparative advantage refers to the ability of a country to produce a particular good or service at a lower opportunity cost than other countries.
By identifying and focusing on industries where they have a comparative advantage, countries can specialize in the production of those goods and services. This specialization allows them to achieve economies of scale, increase productivity, and lower production costs.
Export-oriented industrialization aims to take advantage of this comparative advantage by producing goods and services that are in high demand in international markets. By exporting these products, countries can earn foreign exchange, attract foreign investment, and stimulate economic growth.
Additionally, export-oriented industrialization can lead to the transfer of technology, knowledge, and skills from developed countries to developing countries. This transfer can further enhance the competitiveness and productivity of the industries in the exporting country.
Overall, export-oriented industrialization is a strategy that leverages a country's comparative advantage to promote economic growth through increased exports, foreign exchange earnings, and technological advancements.