International Competitive Advantage

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According to porter, a nation takes a competitive advantage if its firms are competitive. Firms become competitive through innovation. Innovation can include technical improvements to the product or the production process. Information plays a critical role in the process of innovation and improvement information that either is not available to competitors or that they do not seek. The only way to sustain a competitive advantage is to upgrade it to move to more sophisticated types. National success is not heritage, it is created. The classical economic indicators are not sufficient to develop the counties' economy such as natural resources, labour power, interest rates. Firms need to learn how to translate national advantages into international…show more content…
States erect policies that affect firms' ability to trade and invest across borders. Countries use trade to extract political and economic benefits. It is a way of advancing state interests, gaining allies; of using the flow of goods and services to create political dependency and enhance state power. The government role is clear to try as much as possible to help firms to be competitive in the market, and at the same time to sustain the domestic competitiveness. When the government provide what firms want, firms will be able to contribute and sustain international competitive…show more content…
If firms and organizations are doing well and able to sustain competitive advantage in such a competitive market, the country will be able to sustain its competitive advantage. There are some policies that can help firms to sustain competitive advantage and reflect that in the nation’s competitive advantage. The trade policy rules are the most obvious. Because trade crosses national borders and can affect a national economy so deeply. So the government need to be careful in making rules regarding the trade policy. The government tried to govern the trading economy and shape the performance of trading firms; they create rules that directly and indirectly affect the ability of firms to compete across borders. So any economic policy undertaken by the country can be seen as influencing on trade. So if the country can balance between giving the firms what they want and maintaining balance they can sustain international competitive advantage. At some level of abstraction, any economic policy undertaken by the state can be seen as influencing on trade for example: affects relative costs, or demand, favor some firms. States use series of policies for different ends such as: enhancing the competitive performance of national based firm. Rules of Foreign Direct Investment are rules that form the conditions under which the firm can invest directly in the foreign states. Letting firms invest and open in

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