Product Life Cycle THEORY (国际贸易-英文)产品生命周期理论

1、The product life-cycle model of trade (PLC) () “The model (PLC) claims that many products go through a trade cycle, during which the United States is initially an exporter, then loses its export markets and may finally become an importer of the product. ”Louis T. Wells, JR23 Factor Endowment Theory

2、assumed that: same technology in production; production function(生产函数); kind of products.) ( eg: some advanced countries: share very similar general economic conditions) But in reality, the technology every country adopted does exist gap, and this gap is dynamically changing. To explain the causes o

3、f international trade and trade patterns based on the changes in technology ,in 1961, the U.S. economist M. V. Posner proposed the Technological Gap Theory and gave an explanation. 4Technological Gap Theory (技术差距论) Trade maybe caused by technical changes and developments. “Particular technical chang

4、es originate in one country, comparative cost differences(比较成本差异) may induce trade in particular goods during the lapse of time taken for the rest of the world to imitate one countrys innovation. ”International Trade and Technical ChangeA demand lag (需求时滞) (模仿时滞) A reaction lag (反应时滞) A mastery lag

5、(掌握时滞) 56t0模仿国生产和出口模仿国生产和出口T T（时间）（时间）创新国生产创新国生产创新国进口创新国进口模仿国出口模仿国出口创新国出口创新国出口模仿国进口模仿国进口t1t2t3需求时滞需求时滞反应时滞反应时滞掌握时滞掌握时滞模仿时滞模仿时滞模仿国生产模仿国生产国际贸易的可能国际贸易的可能 However (whytake the leading position) (how longimitation gap) By combining PLC in marketing with international trade theory Technological developmen

6、t of a new product generally has three stages: new product stage, the stage of maturity and standardization.78World tradeManufactured products A products lifeTechnology transferFDI (Foreign Direct Investment)Import & Export tradeAdvanced countriesRaymond Vernon Products have a limited market lif

7、e PLC four stages (Marketing) location of production shifts dynamic development of comparative Advantage Theory based on Technological Gap Theory.910 Stage I: The New Product -Innovationhighly skilled labor; capital for R&D; location non-standardized; high cost; monopolizeTechnology-intensiveNo

8、international trade happensStage II: The Maturing ProductStage III: The Standardized Product 11Stage I: The New ProductStage II: The Maturing ProductIncreasingly standardized flexibility in design; manufacturing declines; competitors develop; (prices and profit margins)Loses market or invests abroad

9、trade and investment are intertwinedCapital-intensive Stage III: The Standardized Product 12 Stage I: The New ProductStage II: The Maturing ProductStage III: The Standardized ProductCompletely standardized; Technology accounts less (LDC)Profit margins are thin, and competition is fierce.Labor-intens

10、ive (unskilled)13Stages of Product Development The PLC hypothesis in a has been changing for two reasons: geographical reach (networks spread) overseas subsidiaries (子公司) national markets of the advanced industrialized countries differences reduce-Raymond Vernon14A. The product is initially designed

11、 and manufactured in the U.S.B. As the product moves to the maturing product stage, production expands to other advanced countries.C. The standardized production stage sees the comparative advantage of production and export shift to less developed countries.1516 Exports Imports America Canada and EU Developing nationsCanada and EU import from U.S.Developing nations import from U.S. and Canada and EUU.S. Imports from other nations.TimeT1- T3- T4- T5- As the product life cycle stage changes, the determinants affecting the comparativ