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Trade theories

Unit 3: International Trade and Investment theories and practicesTopic 1 of 3
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What the syllabus expects

  • Mercantilism
  • Absolute cost advantage and comparative advantage
  • Factor endowment
  • Product life cycle and Porter diamond

Trade theories

Bachelor of Business Studies (BBS) — Fourth Year

Subject: International Business (MGT 251)

Unit 3: International Trade and Investment theories and practices

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

  • Explain the scope and key elements of trade theories.
  • Apply the relevant concepts to a defined organizational or venture situation using evidence and stated assumptions.

Curriculum Scope

  • Mercantilism
  • Absolute cost advantage and comparative advantage
  • Factor endowment
  • Product life cycle and Porter diamond

Detailed Microsyllabus

  1. Early trade theories

    1. Explain mercantilist reasoning and its limitations.
    2. Compare absolute and comparative advantage.
    3. Calculate illustrative opportunity costs and specialization benefits.

  2. Factor and product explanations

    1. Explain factor-endowment reasoning and assumptions.
    2. Describe the international product life-cycle approach.
    3. Assess limits of each explanation.

  3. Competitive advantage

    1. Explain the components of Porter's diamond.
    2. Apply theories to a defined trade situation.
    3. Distinguish model predictions from observed evidence.

Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 115–117.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here. Examples involving current laws, rates, institutional products or Nepalese status must identify the relevant period and official materials; no changing numerical or legal requirements are invented here.