Modern Business in Comparative Perspective

The comparison concludes that some economies are better structured and better performing than the other economies around the world. Some of these better-performing economies have come to be referred to as the major economies of the world with the United States, China, the European Union, Germany, and Japan fitting this classification. Questions linger into how they came to attain such a high status in the economic circles and not their peers such as Nigeria, Mexico or Haiti. It is such questions that this essay seeks to address with the major focus on Porter’s national competitive advantage theory in explaining the characteristics and performance of the business systems of major economies.
Apart from Porter’s national competitive theory, various theories have been fronted the behavior, characteristics, and performance of business systems of major economies. These theories are referred to as international trade theories. They fall into two categories. that is the historical trade theories also known as classical and mainly center on the perspective of a country. they are country-based. The second category is the modern firm based theories developed in the 20thcentury by theories as a shift from the country-based theories.
Among the classical trade, theories include mercantilism theory that asserts a country’s wealth is dependent on its gold, in addition to, silver holdings. The theory holds that the big economies of the world retain their holdings of silver and gold via the promotion of exports and hindrance of imports. When the countries are buying more from these big economies instead of selling more to them, they pay the variation in gold as well as silver. The aim of every state is to have a trade surplus and discourage trade&nbsp.deficit. Mercantilism is a component of contemporary thinking in big economies. For instance, Germany and Japan still favor exports and discourage imports by adopting a blend of protectionist principles and limitations as well as domestic industry subsidies.&nbsp.