IDEAS home Printed from https://ideas.repec.org/a/ate/journl/ajbev1i1-1.html
   My bibliography  Save this article

Comparative Advantage and Competitive Advantage: An Economics Perspective and a Synthesis

Author

Listed:
  • Satya Dev Gupta

Abstract

There is a considerable amount of controversy about the model(s) of comparative advantage and its applicability to international business, in particular as a guide to the success of nations and/or firms in international markets. This perception (or understanding) of inapplicability of the model(s) of comparative advantage has lead international business experts to develop new models, or what may be called frameworks, for analyzing the potential for success of firms and/or nations in international markets. These frameworks are popularly known as models of "competitive advantage". In the author's view, the model(s) of comparative advantage are too general to be dismissed altogether in this manner. While they may not be applicable to all circumstances in international business, they are valid models and can still offer meaningful predictions in a variety of circumstances. Furthermore, the models of comparative advantage used together with models of competitive advantage have the potential of offering a much richer analysis of international trade/business, normally not available with either the model(s) of comparative advantage or the model(s) of competitive advantage alone. The major aim of this paper is to establish a link between the principles of comparative and competitive advantage, and outline a synthesis of the two principles as a guiding force for gauging success of nations and/or firms in international trade/business.

Suggested Citation

  • Satya Dev Gupta, 2015. "Comparative Advantage and Competitive Advantage: An Economics Perspective and a Synthesis," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 1(1), pages 9-22, January.
  • Handle: RePEc:ate:journl:ajbev1i1-1
    DOI: =10.30958/ajbe.1-1-1
    as

    Download full text from publisher

    File URL: http://www.atiner.gr/journals/business/2015-1-1-1-Gupta.pdf
    Download Restriction: no

    File URL: https://libkey.io/=10.30958/ajbe.1-1-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. J. Peter Neary, 2003. "Competitive versus Comparative Advantage," The World Economy, Wiley Blackwell, vol. 26(4), pages 457-470, April.
    2. Theo S. Eicher & Christian Henn & Chris Papageorgiou, 2012. "Trade creation and diversion revisited: Accounting for model uncertainty and natural trading partner effects," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 27(2), pages 296-321, March.
    3. Buller, Paul F. & McEvoy, Glenn M., 1999. "Creating and sustaining ethical capability in the multi-national corporation," Journal of World Business, Elsevier, vol. 34(4), pages 326-343, January.
    4. Luo, Yadong, 2000. "Dynamic capabilities in international expansion," Journal of World Business, Elsevier, vol. 35(4), pages 355-378, January.
    5. Peter G. Warr, 1994. "Comparative and Competitive Advantage," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 8(2), pages 1-14, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Piotr Banaszyk & Przemysław Deszczyński & Marian Gorynia & Krzysztof Malaga, 2021. "Przesłanki modyfikacji wybranych koncepcji ekonomicznych na skutek pandemii COVID-19," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 53-86.
    2. Destaw M. Mazengia & Xia Youfu, 2021. "The Moderating Effect of Institutional Environment on Oilseed Export Competitiveness in Sub-Saharan African Countries," International Journal of Science and Business, IJSAB International, vol. 5(4), pages 189-206.
    3. Evgenia Tonkova & Sevdalina Hristova & Dancho Petrov, 2020. "Comparative Advantages in Attracting Investments - Contemporary View," Izvestia Journal of the Union of Scientists - Varna. Economic Sciences Series, Union of Scientists - Varna, Economic Sciences Section, vol. 9(3), pages 12-18, December.
    4. Banaszyk, Piotr & Deszczyński, Przemysław & Gorynia, Marian & Malaga, Krzysztof, 2021. "Przesłanki modyfikacji wybranych koncepcji ekonomicznych na skutek pandemii COVID-19," Gospodarka Narodowa-The Polish Journal of Economics, Szkoła Główna Handlowa w Warszawie / SGH Warsaw School of Economics, vol. 2021(1), March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lee, Chaehwa & Wilhelm, Wilbert, 2010. "On integrating theories of international economics in the strategic planning of global supply chains and facility location," International Journal of Production Economics, Elsevier, vol. 124(1), pages 225-240, March.
    2. Yi-Ju Lo & Tung Hung, 2015. "Structure offshoring and returns on offshoring," Asia Pacific Journal of Management, Springer, vol. 32(2), pages 443-479, June.
    3. Quan Anh Nguyen & Gillian Sullivan Mort, 0. "Conceptualising organisational-level and microfoundational capabilities: an integrated view of born-globals’ internationalisation," International Entrepreneurship and Management Journal, Springer, vol. 0, pages 1-23.
    4. Ziggers, Gerrit Willem & Tjemkes, Brian, 2010. "Dynamics in Inter‐Firm Collaboration: The Impact of Alliance Capabilities on Performance," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 1(2), pages 1-16.
    5. D. Vines, 1994. "Australian Trade Liberalisation, APEC, and the GATT," Economics Discussion / Working Papers 94-11, The University of Western Australia, Department of Economics.
    6. Sun, Wenbin & Price, Joseph & Ding, Yuan, 2019. "The longitudinal effects of internationalization on firm performance: The moderating role of marketing capability," Journal of Business Research, Elsevier, vol. 95(C), pages 326-337.
    7. Xiao Zhang & Luqun Xie & Jiatao Li & Li Cheng, 2022. "“Outside in”: Global demand heterogeneity and dynamic capabilities of multinational enterprises," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 709-722, June.
    8. H.W. Arndt, 1998. "Globalisation," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 51(204), pages 73-89.
    9. Peter Ping Li & Shameen Prashantham & Abby Jingzi Zhou & Steven Shijin Zhou, 2022. "Compositional springboarding and EMNE evolution," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(4), pages 754-766, June.
    10. Vijverberg, Wim P. & Hasebe, Takuya, 2015. "GTL Regression: A Linear Model with Skewed and Thick-Tailed Disturbances," IZA Discussion Papers 8898, Institute of Labor Economics (IZA).
    11. Buckley, Peter J. & Munjal, Surender & Enderwick, Peter & Forsans, Nicolas, 2016. "Cross-border acquisitions by Indian multinationals: Asset exploitation or asset augmentation?," International Business Review, Elsevier, vol. 25(4), pages 986-996.
    12. Chen, Binkai & Lin, Justin Yifu, 2021. "Development strategy, resource misallocation and economic performance," Structural Change and Economic Dynamics, Elsevier, vol. 59(C), pages 612-634.
    13. J. Peter Neary, 2006. "Measuring Competitiveness," The Economic and Social Review, Economic and Social Studies, vol. 37(2), pages 197-213.
    14. Stoian, Carmen & Mohr, Alex, 2016. "Outward foreign direct investment from emerging economies: escaping home country regulative voids," International Business Review, Elsevier, vol. 25(5), pages 1124-1135.
    15. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
    16. Eriksson, Taina & Nummela, Niina & Saarenketo, Sami, 2014. "Dynamic capability in a small global factory," International Business Review, Elsevier, vol. 23(1), pages 169-180.
    17. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2015. "Can Trade Agreements Curtail Trade Creation and Prevent Trade Diversion?," Review of International Economics, Wiley Blackwell, vol. 23(2), pages 221-238, May.
    18. Bernard C. Beaudreau, 2016. "Competitive and Comparative Advantage: Towards a Unified Theory of International Trade," International Economic Journal, Taylor & Francis Journals, vol. 30(1), pages 1-18, March.
    19. Gnutzmann-Mkrtchyan, Arevik & Henn, Christian, 2018. "Peeling away the layers: Impacts of durable tariff elimination," Journal of International Economics, Elsevier, vol. 115(C), pages 259-276.
    20. Todd Sanderson & Fredoun Z. Ahmadi‐Esfahani, 2009. "Testing Comparative Advantage in Australian Broadacre Agriculture Under Climate Change: Theoretical and Empirical Models," Economic Papers, The Economic Society of Australia, vol. 28(4), pages 346-354, December.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ate:journl:ajbev1i1-1. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Afrodete Papanikou (email available below). General contact details of provider: https://www.athensjournals.gr .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.