In Raymond Vernon's theory, everything seems
logical, but a deeper analysis shows that in fact the
reasons for moving production from country to
country are not problems with the availability of
production technology, but the usual geographical
differences of countries (if in some countries it is
impossible to produce any benefit lack of the
necessary resources, such as skilled labor) or the
usual spatial differentiation of production costs.
Therefore, the benefits that could be called
"Raymond Vernon-benefits" are actually "Adam
Smith-benefits" or "Adam Smith-benefits-2".
In 1961, Michael Posner proposed the theory of
technological advancement (Theory of
Technological Gap), according to which one of the
reasons for international trade is technological
innovation, which allows an innovator country to
obtain a quasi-monopoly on new products and
export it profitably and without competition. ,
importing non-knowledge-intensive products [28].
Over time, the technological gap narrows due to
technology transfer, import substitution, and the
introduction of alternative technologies in other
countries. Then it all starts again: new innovative
solutions (not necessarily in the same country) lead
to new export-import flows. Although the theory of
technological advancement is considered by some
scientists to be a branch of the Heckscher-Olin
theory, it can rather be called a component of
Raymond Vernon's theory in the first stage of the
product life cycle (implementation). If the
implementation phase is implemented in one
country, it is not due to the impossibility of its
implementation in another country, but due to the
high cost of this in the absence of the necessary
resources, especially such as specialized
infrastructure and qualified personnel. Non-mobile
resources (specialized infrastructure) will need to be
created and mobile (qualified personnel) will need
to be imported, which will require significant
investment costs and a lot of time. Therefore, the
potential "Michael Posner-good" is actually "Adam
Smith-good-2".
One of the theories of international trade is
often called the gravitational model, according to
which trade between two countries is directly
proportional to the product of their economic
potential and inversely proportional to the distance
between them [1, 2, 3, 40]. In addition to gross
domestic product (GDP), the significance of
countries' economies is modeled in gravitational
equations by population, country area, border
length, and so on. It can be agreed that the "force of
economic gravity", ie the size of trade between
countries depends on the distance between them and
the size of their economies, but they do not
determine international trade. Gravitational theory
to some extent explains the volume of international
trade, but not its causes.
Among the theories of international trade, there
are those that try to explain it not in terms of
production of goods, but in terms of their
consumption. One of the first attempts to explain the
peculiarities of modern international trade was made
by Staffan Linder in 1961, considering the features
of technologically new products (refrigerators,
televisions) with which American firms entered the
European market in the 1950s. [23] He pointed out
that although the main inventions underlying the
development of these goods were made by
Europeans, they were practically embodied in the
United States in the form of technologically new
goods, which then conquered the foreign market in
Europe.
According to Stephen Linder, the wealthy
American consumer was more inclined to consume
new expensive goods, and as Europeans' living
standards rose, new American goods found their
way to Europe. Stefan Linder concluded that
technologically complex products are created by the
firm in response to existing needs, ie primarily to
the needs of the domestic market. And only after the
expansion of production, after saturation of the
domestic market, the firm seeks to capture the
external. The firm will enter the foreign market on
the basis of goods prepared by it for domestic
consumers, therefore, the consumption structure of
the importing country should be as similar as
possible to the consumption structure of the
exporting country. Thus, according to Stefan Linder,
not only differences but also similarities between
countries can be a prerequisite for trade.
In describing this theory, it should be noted at
once that the "rich American consumer" could easily
buy technologically new goods even if they were
produced in Europe or, as has been the case in
recent decades, in Japan, South Korea, or China. It
was not the "rich American consumer" at the time,
but the well-functioning US economy, which made
it possible to produce high-tech products at
relatively low cost. We all remember the days when
American scientists made many inventions that were
the basis for the production of goods in Japan - and
not so much for domestic consumption as for export
(including the United States). That is, Stefan
Linder's theory, when properly analyzed, turns out
to be Adam Smith's camouflaged theory of absolute
benefits in terms of the benefits gained (resulting in
the production and export of Adam Smith-goods-2.).
WSEAS TRANSACTIONS on BUSINESS and ECONOMICS
DOI: 10.37394/23207.2022.19.47
Stadnicki Jerzy, Oksanych Oleksandr