What is the theory of national competitive advantage?

The theory of national competitive advantage refers to the competitive ability of a specific industry in a country or region relative to the same industry in other countries or regions in terms of production efficiency, meeting market demand and sustained profits. The theory of national competitive advantage is one of the international authorities in the field of competitive strategy and international competitiveness, which was put forward by Professor Michael Porter, a famous scholar in Harvard Business School. Specifically, the content of theoretical comparison of national competitive advantage is industrial competitive advantage, which is finally reflected in the market realization ability of products, enterprises and industries.

Brief introduction to the theory of international competitive advantage;

The traditional H-O theory is basically a static theoretical system, lacking a dynamic perspective to analyze the resource endowments and comparative advantages of countries. In order to overcome the shortcomings of traditional international trade theory, some economists began to seek new trade theories and trade policy choices outside the framework of H-O theory, and the most influential theory in this respect is the theory of national competitive advantage.

Porter believes that a country's trade advantage is not simply determined by a country's natural resources, labor force, interest rate and exchange rate, as claimed by traditional international trade theory, but depends to a great extent on a country's industrial innovation and upgrading ability. Because contemporary international competition relies more on the creation and absorption of knowledge, the formation and development of competitive advantage is more and more beyond the scope of a single enterprise or industry, and it has become the result of the comprehensive action of various factors within an economy. A country's values, culture, economic structure and history all become the source of competitive advantage.

Refer to the above content: Baidu Encyclopedia-Competitive Advantage Theory