Order Essay. This inequality of development leads to resource issues because factories require raw materials to operate. A myriad of economic benefits stems from this particular development. Overall, exporting can be a valuable way for businesses to access new markets and increase their profits. Export-Oriented Industrialization (EOI): Arguments For and Against What Have Been Experienced of Developing Countries With Regard to EOI Jan. 16, 2013 12 likes 24,252 views Download Now Download to read offline Economy & Finance Dr.Choen Krainara Follow Consultant Advertisement Recommended Large slums began forming in many of the communities where entire families were sometimes living in studio apartments. MSCI, the US company that introduced the benchmark MSCI Emerging Market index in 1988, defines an emerging market in terms of the number of quoted compa-nies of a certain size and free float (the proportion of shares available for ordinary investors to buy), plus a markets openness to foreign ownership and capital. If the value of the foreign currency in which a business is paid declines significantly, it can eat into the profits that the business generates from its exports. Apart from that, such states can become extremely dependent on the trade policies of other states. International trade open up the world potential market to increase producer sales quantity and increase competition on foreign country. 4. 9. This is the main thesis that can be put forward. Factory towns like Hershey had a reputation for providing workers with quality housing and access to needed resources. This essay aims to analyse advantages and disadvantages of the application of ISI through an infant industry theory, focusing on how a complementary Export Oriented policy helps to avoid the main unwanted outcomes connected to such a policy, considering the successful development in China of an ISI policy Economies of scale Another instance of export benefits is that of economies of scale. May 23, 2020. https://ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. Export-led growth has a lot to do with self-sufficiency. The wealthy built our modern society through the efforts of desperate people who wanted to help their children and grandchildren have a better life. This is the main prerequisite for a persons ability to climb the social ladder and become competitive in the labor market. During the initial days of industrialization, people like John Rockefeller and Andrew Carnegie held that much money by themselves. To browse Academia.edu and the wider internet faster and more securely, please take a few seconds toupgrade your browser. Industrialization created the surge in automation that we experience today. When electricity became available, then humanitys standard of living increased even further because of these efforts. Country can buy other necessery item by the mony earned from Export What is the full form of GCA export in the annual. In fact, in small countries have small area, small population and small markets and when they use export orientated strategy then can get larger scale economy profit. We utilize security vendors that protect and Failure to know what they are and to comply can waste valuable company resources. Import substitution, on the other hand, is the opposite. It allows us to become more productive. Import substitution industrialization (ISI) was pursued mainly from the 1930s through the 1960s in Latin Americaparticularly in Brazil, Argentina, and Mexicoand in some parts of Asia and Africa. subordinate short-term profits to long-term gains. Export-oriented industrialization (EOI) is the industrialization process governed by economic policies that are aimed towards enhancing the export sector of a country. Nevertheless, policy-makers and economists should remember that the implementation of this strategy depends on such factors accessibility of market, the level of corruption, skills of local workers, and willingness of entrepreneurs to invest into new technologies. Defined simply, export-oriented Industrialization (EOI) often termed as export led industrialization (ELI) is a policy designed for the purpose of speeding up the industrialization process of a country through exporting goods for which the nation has a comparative advantage. Export-oriented industrialization was particularly characteristic of the development of the national economies of the Asian Tigers: Hong Kong, South Korea, Taiwan, and Singapore in the post-World War II period. The first is that export-led growth can create profit, allowing a country to balance their finances, as well as surpass their debts as long as the facilities and materials for the export exist. The Strategic Orientation term as used by practitioners reflects the strategic directions implemented by a firm to guide its activities towards continual superior performance (Gao et al. In general, the countries with a preference for planning, regulated markets and public enterprises opted for import substitution, while countries which believed in the merits of market mechanism and private enterprise, concentrated upon the strategy of export- led growth. During the 19th century, it was not unusual to see people working with a finger, a limb, or worse. This flow of capital is also critical for the growth of industries. Get your 100% original paper on any topic done in as little as 3 hours Learn More The developed countries adopted a different approach to the development of economy. I will compare the different articles and analyze the arguments. A ) Discuss the forms of restriction on international trade. It should be borne in mind that the comparative advantage can be explained by several factors, for instance, the presence of natural resources, the availability of skilled and less expensive labor force, or even the climate of a country. survey. For example, after financial crisis, the financial crisis, international raw material and energy prices practiced sharp volatility and this situation caused difficulties for countries which they wanted following this strategy. Too much dependence on middlemen: The main drawbacks of indirect exporting is too much dependence of the exporter producer on the middlemen operating in the channel. If you were sick or got injured, then youd probably get fired. 18 Big Advantages and Disadvantages of Group Decision Making, 16 Key Advantages and Disadvantages of Cluster Sampling, 18 Major Advantages and Disadvantages of the Payback Period, 20 Advantages and Disadvantages of Leasing a Car, 19 Advantages and Disadvantages of Debt Financing, 24 Key Advantages and Disadvantages of a C Corporation, 16 Biggest Advantages and Disadvantages of Mediation, 18 Advantages and Disadvantages of a Gated Community, 17 Big Advantages and Disadvantages of Focus Groups, 17 Key Advantages and Disadvantages of Corporate Bonds, 19 Major Advantages and Disadvantages of Annuities, 17 Biggest Advantages and Disadvantages of Advertising. Your privacy is extremely important to us. There is saving of time and labor. must. This can be particularly useful in times of economic downturn, as it can help to mitigate the impact of downturns in one particular market by relying on demand from other markets. For such a thing, they are offering several additional benefits as well. 1996. It is necessary to focus on less developed countries which implemented this policy after the end of World War II. 9. What are the advantages of export oriented industrialization? Why would a business export? Similar strategies have been implemented in India. Import substitution industrialization (ISI) was pursued mainly from the 1930s through the 1960s in Latin Americaparticularly in Brazil, Argentina, and Mexicoand in some parts of Asia and Africa. On the other hand, growth and development from export oriented industries, EOI, has greater results and is so much faster than import substituting industries. Industrialization brought us the current import-export market. Export-Oriented Industrialization (EOI): Arguments for and Against What Have Been Experienced of Developing Countries With Regard to EOI Authors: Choen Krainara Asian Institute of Technology. casts doubt on the overall validity of the export-led development hypothesis. industrialization of developing countries occurred according to two broad types of strategies. Therefore, it is not possible to argue that export-oriented industrialization inevitably lead to inequality within a society. Industrialization brought us a series of new and useful items, hand tools, and additional ways to be productive. This process led to the development of new best practices, eventually leading to improved patient outcomes. These steps led to changes in family structure as industrialization continued to develop. Wong, Y.Y and Chan, P.S (1993) 'The Global Textile and Apparel Industries: US Protectionism and the Strategic Responses of Asian Competitors. ' Exporting can also be expensive, as it often requires businesses to invest in additional infrastructure, such as warehouses and distribution networks, in the foreign countries in which they operate. This is true of many economies aiming to exploit their comparative advantage in primary commodities as they have a . Dr.Choen Krainara 24.3k views Krugman obstfeld-ch10 Vandy K. 2.9k views A causal relationship between fdi inflows and export Alexander Decker 590 views Association between Investment, Production, Export and Import: The Impact of. In many cases, companies that are based in less developed countries can achieve leading positions in the market because their production is more cost-efficient (Dickson 2013, p. 1991). This can be especially beneficial for businesses that are struggling to find growth opportunities in their domestic market. It is a term usually applied to those THIRD WORLD countries which have attempted to find niches in the world market where advantages of low labour costs may make their goods cheaper than those produced in industrial countries. A process of creating many opportunities but also causes many challenges for all the nations in the world, particularly for developing countries. Nevertheless, it has also been argued that this strategy can lead to exploitation of laborers and increasing inequality in the society (Schuerkens 2010, p. 102). The database is updated daily, so anyone can easily find a relevant essay example. Nevertheless, this policy can be successful if several prerequisite conditions are present. Campbell, J 2013, Nigeria: Dancing on the Brink, Rowman & Littlefield Publishers, Boston. Exposure to price and marketing competition, differing management systems, innovations, among other factors, will force your business to adapt accordingly in order to remain competitive. Communication processes improved because of industrialization, eventually leading us to the telephone and fiberoptic cables. Instead of a majority of jobs being out in the fields, people are now sitting in front of computers in cubicles. So naturally the overall output of growth will rise. With machines helping humans to create products with greater speed, then the cost of labor per unit went down. This outcome didnt always happen. The world started to see that the balance of trade was shifting to the producer, increasing the wealth of businesses, and adding tax revenues to society. We often take for granted the child labor laws that exist today. It allows a worker to focus on specialization. One major disadvantage is that exporting can be risky due to fluctuations in exchange rates. If you are the copyright owner of this paper and no longer wish to have your work published on IvyPanda. These could help in improving those countries position in the world. That results in a further stimulus to economic growth and industrial investment. Each new invention or best practice that came about because of industrialization led to more jobs for the global economy. It focuses in some senses on what the mainstream literature may be seen to neglect, but in doing so considers that from a legal/institutional perspective one appreciates that the relationship between trade liberalization and labour law is constructed, shaped, redirected by state action. It is up to us to clean up the pollution that comes about as a side effect to these efforts. The most vivid example of this transformation is Japan because it acquired leading roles in such industries as automobile manufacturing or electronics. Retrieved from https://ivypanda.com/essays/export-oriented-industrialization-and-its-principles/. Other criticisms include that export oriented industrialization has limited success if the economy is experiencing a decline in its terms of trade, where prices for its exports are rising at a slower rate than that of its imports. It has led to a form of sedentary productivity where we focus on convenience more than wellness. Export-oriented model does not necessarily bring about high productivity. Nevertheless, governmental officials cannot always predict emerging trends the world economy (Dickson 2013, p. 1991). 18 Advantages and Disadvantages of Industrialization. Another advantage of exporting is that it can help businesses to take advantage of economies of scale. Industrialization brought us the current import-export market. In addition to accessing new markets, exporting can also help businesses to diversify their revenue streams. Nevertheless, these problems encountered by Nigeria can be resolved by the government. This phenomenon is often described as a resource curse which means that the exportation of resources is associated with the decline of other industries. By producing goods in larger quantities, businesses can often lower their production costs and increase their profitability. In turn, the nation that adopts this strategy has to focus on those areas where it can best compete with foreign countries. in different nations. When that many people lived close together in unsanitary conditions, it was not unusual for diseases to start spreading rapidly. These institutions co-evolve in complex interactions between formal and informal institutions (North, 1990) at national as well as local level. Can The tpms sensors on a 2002 Ford Explorer can be activated using a magnet.. However, that could be time consuming and more difficult to obtain than domestic data. 1. While there is no universally agreed definition of globalization, economists typically use the term to refer to international integration in commodity, capital and labour markets. For example, one can mention sportswear, knitted garments, cotton, sugar cane, wheat, rice, and many others (Rameshan, 2008, p. 67). Additionally, this strategy eventually leads to the rising income level of people who can improve the quality of their lives. The contemporary challenges to labour regulation in low income settings of the South are also ripe for a less deterministic analysis of the impact of trade regulation once contemporary regulatory action is considered broadly, and across governance levels. The researcher can bring forward his findings either in the form of quantitative or qualitative or mixed research methodologies only when the data is collected based on the preliminary data gathering process and the secondary data gathering process. Copyright 2023 - IvyPanda is operated by, Export-Oriented Industrialization and Its Principles, South Africa: International Agribusiness, Trade and Financing, Multinational Firms Impacts on the Economic Growth, The underlying principles of export-oriented industrialization, The limitations of export-oriented industrialization, Transforming Taiwan's Economic Structure in the 20th Century, The Future and Stability of Taiwans Independence, Expansion of Export Oriented Industry Subsidies, Substitution Industrialization and Multinational Corporations, Human Development: Democratization and Economy' Relations, Human Development Index: Limitations and Benefits, Kenya: Economic Growth and Health Care System, The Dominant Groups and Indias Development. East Asian countries can therefore continue their export oriented strategy, but should be prepared for slower progress than in past decades. For example, the state can provide subsidiaries to the enterprises that represent a particular sector of an economy. It shifted our perspective of wants vs. needs. 8. Investopedia define Globalization as the tendency of investment funds and businesses to move beyond domestic and national markets to other markets around the globe, thereby, If all of these criteria are met, a candidate is legally, While considering there were many helpful, positive effects to industrialization, in the end, the negative out-weighs the positive. Much attention should be paid to Asian countries such as Singapore or Taiwan. It will be used different resources related to the topic. Wang Bo Ren(2006) argued that the export-oriented industrialization model need some prerequisites: some of the domestic industrial sector has already high level of technology and production management experience, also the adequate management personnel and skilled workforce. Need a custom Essay sample written from scratch by For low- and high-income countries, however, export promotion does not have any significant impact on economic growth. If this initiative is absent, the economy of a country may stop to grow. However, it does not include unhindered movement of labor and, as suggested by some economists, may hurt smaller or fragile economies if applied indiscriminately. Growth strategy is a strategy aimed at winning greater market share, even at the expense of short-term profit. These are the main benefits of export-oriented industrialization. This is the main risk that entrepreneurs should be aware of. View Essay - 8 23. It was a change that led to mass production of numerous items, lower costs and improved availability to the average family. With artificial intelligence and machine learning taking over many of todays repetitive processes, this shift in our economy changed the way we think about productivity. Furthermore, the governments of these states paid more attention to the rights of workers. We will write a custom Essay on Export-Oriented Industrialization and Its Principles specifically for you for only $16.05 $11/page. At that time, these countries were profoundly affected by poverty and increasing unemployment rates (Hamilton 1996, p. 1). List of the Advantages of Industrialization 1. What does this mean emulate what you respect in your friends? Therefore, one should not suppose that export-oriented industrialization always brings success. Industrialization makes goods and services more affordable. This strategy enabled many states to raise the standards of living and boost the development of industries. 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