Drawing on the new trade theory and Porter's theory of national competitive advantage, outline the case for government policies designed to build a national competitive advantage in biotechnology. What kind of policies would you recommend the government adopt? Are these policies at variance with the basic free trade philosophy?
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Answer:
Porter's theory of national competitive advantage argues that the four general attributes of a nation form an environment in which local companies compete, and that these attributes contribute to or hinder the creation of competitive advantage. These attributes are: safety factor, demand conditions, related and support industries, as well as the company's strategy, structure and competence. Porter goes on to argue that companies are likely to succeed in industries where diamond (which is the four attributes) is favorable. Porter adds two factors to the list of attributes described above: randomness and public policy. The New Theory of Trade addresses a separate topic. This theory asserts that due to substantial economies of scale, global demand will only support a few companies in many industries. At the core of this argument is the concept of pioneering benefits, which are the economic and strategic benefits obtained by the first participants in the industry. It can be argued that when the attributes of a nation contribute to the production of a product, and when the manufacturers of this product experienced some "random" events that gave them a pioneering advantage, this nation's government policy should help create an advantage. national competitive in this particular area. This can be accomplished with government research and development grants, policies that favor the industry in capital markets, educational policies, creating a supportive regulatory environment, reducing taxes, and the like. Ask your students if they think this policy goes against the basic philosophy of free trade. It can be argued that this is so because government intervention creates the basis for comparative advantage. Conversely, it can be argued that if a country establishes a comparative advantage in a specific area based on a single set of attributes (such as Swiss watchmaking), global production will have a beneficial effect if this country is allowed to continue its area comparative. advantage.
Final answer:
Government policies can help harness the benefits of the new trade theory and Porter's theory of national competitive advantage, potentially driving national competitive advantage in the biotechnology sector. However, these policies, if involving protectionist measures, can be at variance with the principle of free trade.
Explanation:
Drawing upon the new trade theory and Porter's theory of national competitive advantage, government policies can play a pivotal role in building a national competitive advantage in the biotechnology sector. According to new trade theory, countries can benefit from specialising in the production of certain goods and services wherein they can achieve economies of scale and network effects. In the case of the biotechnology sector, this could be encouraged through policies in the form of research and development grants, tax incentives for biotech firms, and investment in infrastructure and education related to biotechnology.
Porter's national competitive advantage framework suggests that government's role in creating a conducive 'diamond' of factor conditions, demand conditions, related and supporting industries, and firm strategy, structure and rivalry is crucial. Here, establishing strong university-industry collaborations, rigorous regulations to maintain quality, and national guidelines for biotech firms can be steps forward.
However, these suggested policies of promoting a certain industry might seemingly be at odds with the philosophy of free trade, which advocates for minimal government intervention and open markets for all goods and services. It may be seen as a move towards 'protectionism', particularly if the policies involve subsidies or tariff barriers to protect domestic biotechnology firms from foreign competition.
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Related Questions
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A U.S. manufacturing company operating a subsidiary in an LDC (less-developed country) shows the following results:U.S. LDCSales (units) 100,000 20,000Labor (hours) 20,000 15,000Raw materials (currency) $20,000 FC 20,000Capital equipment (hours) 60,000 5,000a. Calculate partial labor and capital productivity figures for the parent and subsidiary. Do the results seem confusing?b. Compute the multifactor productivity figures for labor and capital together. Do the results make more sense?c. Calculate raw material productivity figures (units/$ where $1=FC 10). Explain why these figures might be greater in the subsidiary.
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Answers
Answer: $300,000
Explanation:
Given that,
Taxable income,
First quarter = $100,000
Second quarter = $50,000
Third quarter = $90,000
we need to annualized the cumulative taxable income of first half of the year that will have taxable income for the first and second quarters.
Annualizing the cumulative taxable income:
= 2 × (First quarter taxable income + Second quarter taxable income)
= 2 × ($100,000 + $50,000)
= $300,000
Therefore, Omnidata's annual estimated taxable income for purposes of calculating the third quarter estimated payment is $300,000.
For the Year Ended December 31, 2022
Sales revenue $ 145,200
Cost of goods sold 105,000
Gross profit 40,200
Selling expenses $10,800
Administrative expenses 3,600 14,400
Income from operations 25,800
Interest expense 1,800
Income before income taxes 24,000
Income tax expense 4,800
Net income $ 19,200
Additional data:
1. Depreciation expense was $10,500.
2. Dividends declared and paid were $12,000.
3. During the year equipment was sold for $5,100 cash.
This equipment cost $10,800 originally and had accumulated depreciation of $5,700 at the time of sale.
Prepare a statement of cash flows using the indirect method.
Answers
Answer:
statement of cash flows using the indirect method
Cash flow from Operating Activities
Cash Receipts from Customers $145,200
Cash Paid to Supplies and Employees ($108,900)
Net Cash from Operating Activities $36,300
Cash flow from Investing Activities
Proceeds from Sale of Equipment $5,100
Net Cash from Investing Activities $5,100
Cash flow from Financing Activities
Dividends Paid ($12,000)
Net Cash from Financing Activities ($12,000)
Movement during the period $29,400
Cash and Cash Equivalents at Beginning of the Period 0
Cash and Cash Equivalents at the End of the Period $29,400
Explanation:
Cash Receipts from Customers Calculation :
Sales revenue $ 145,200
Assuming Cash Sales
Cash Paid to Supplies and Employees Calculation :
Cost of goods sold $105,000
Add Selling Expenses $10,800
Add Administrative expenses $3,600
Less Depreciation ($10,500)
Cash Paid to Supplies and Employees $108,900
Final answer:
The statement of cash flows for Crane Company using the indirect method starts with the net income and then adjusts for non-cash items such as depreciation and the gain/loss from equipment sale. The net Cash provided by operating activities would be $17,700. This method helps understand the cash movements within the company.
Explanation:
To prepare a statement of cash flows for Crane Company for the year ended December 31, 2022 using the indirect method, you first start with the net income from the income statement and then make adjustments for changes in non-cash items, add back depreciation expense (a non-cash item) and account for the gain/loss from the sale of equipment. The prepared statement would look like this:
- Net Income: $19,200
- Add: Depreciation Expense: $10,500
- Add: Loss on Sale of Equipment (original cost - accumulated depreciation - sale price): ($10,800 - $5,700 - $5,100) = $0
- Less: Dividends Paid: $12,000
The net Cash provided by operating activities would be $17,700 ($19,200 + $10,500 - $12,000). This method helps in revealing the sources and uses of cash within the company.
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Answers
Answer:
A
Explanation:
the sales price increase and because the variable cost are the same the contribution margin will increase, which lead to think the BEP is lower.
But, because the fixed cost also increase we cannot determinate where the new BEP Will be higher or lower. The fixed cost could increase so much that nulifies the increase in the contribution margin or even be higher enought that the BEP goes higher.
So Option A is the only true statment.
Answers
Answer:
$38,851 approx
Explanation:
As per the information provided in the question, the minimum annual rate of return would be at-least equal to the usual rate of return the investor (here uncle) earns. Here it is 9% per annum.
Anything earned below this rate of return will not satisfy the investor since this represents the minimum required rate of return.
A=
Where A= Amount
P= Principal
r= Annual Rate Of Interest
n= period of loan
Therefore, A=
A= $38,850.87 or $38,851 approx.
Answers
Answer:
c. auditors and financial statement users.
Explanation:
This is because, the auditors and the financial statement users tends to have different views on what their responsibilities are. Since their views differs, their tend to be a gap which occurs. This gap is called audit expectation gap. This could be minimized through self regulating auditing of the financial statement before the final auditing by auditors.