How Did The Industrial Revolution Affect International Trade
The Industrial Revolution opened the door for new avenues within the trading industry. Trade was no longer limited to short distance areas. Countries began to incorporate trade with other countries due to different modes of transportation options so more product opportunities were available. Trade avenues included transporting good via of camels or donkeys in the inland areas, boats or ships were used on the waterways whether it was a river or sea, and eventually, trains were used once the railroad was created.
b. Why countries engage in international trade rather than keeping their products and in their own country
“People or entities trade because …show more content…
Modern firm based theories are based on a firm and not a country. Classical based theories were based on promoting exports but discouraged imports. “The objective of each country was to have a trade surplus, or a situation where the value of exports are greater than the value of imports, and to avoid a trade deficit, or a situation where the value of the imports is greater than the value of exports” (Carpenter & Dunung). In allowing classical based theories, a sense of product protection is taken into consideration. Firm based theories include other products or service of other countries. Brand names are considered, including customer loyalty of those particular brands. There are many brands sold within the U.S. that are not produced within the U.S. The brand name encourages continual customer purchases because the customer trusts the product and the quality of which the product is manufactured. Both concepts encourage trade that results in having the upper hand in certain situations. However, the classical country theory impacts the home country and while that theory may have more control over what happen to those products it also limits the ability to grow internationally. The firm based theory has less control over what happens and has more to gain or lose by trading with an outside