1 Guidance for Preparing for Midterm Exam 2 – Spring 2015 MNGT 375 Section 007

2 Exam will be on Wednesday, March 11, 2015 Exam will be all Essay Bring your own paper – do not use bluebooks Midterm Exam 2 covers Chapters 5, 6, and 7 and class discussions. Review your lecture notes and especially the key points identified on the following slides.

3 Chapters 5, and 6: –Be able to give an explanation of trade theory and its implications to your neighbor who knows nothing about the theory. You should consider: The benefits and concerns about trade Why a current account deficit may not matter, see pp How the theories of absolute advantage and comparative advantage explain and justify trade, The lessons for doing international business from the Chapter 5 Case, “Logitech,” pp Porter’s diamond of “National Competitive Advantage” as a framework for understanding international competition and trade The types of trade policy instruments that governments use to manage trade and governments’ motivations for managing trade

4 Chapters 5, and 6 (cont.): –Be able to summarize and explain the development of the World Trading System, pp –What is new trade theory (also termed strategic trade theory) and why is it not supportable as trade policy?

5 Chapter 7: –Know the theories explaining Foreign Direct Investment (FDI) –Be able to explain the ideologies associated with FDI –Know the benefits and costs of FDI –Be able to explain how the theories of FDI help to explain the FDI of Spain’s Telefonica (pp )

6 AGAIN New York Times article “Economic Recovery, Made in Bangladesh” May 14, 2013 Go to the following web link for the article indicated at the top of this slide: recovery-made-in-bangladesh.html?pagewanted=all recovery-made-in-bangladesh.html?pagewanted=all As with midterm exam 1, you will be able to bring a hard copy of the article for this midterm exam 2, so print out a copy of the article. Be able to explain: –The “T-shirt” phase through the trade, product life cycle, and national competitive advantage theories. –The benefits and problems associated with the “T-shirt” and garment trade. –Why governments might wish to manage the “T-shirt” and garment trade. –How each of the ideologies of Foreign Direct Investment might describe the “T-shirt” and garment trade.