Question

_________ suggests that in the first stage innovations are produced in the home developed country; in the second stage they are exported to other similarly developed countries; in the third stage, they start being produced in these developed countries; in the fourth stage they start being produced in low-wage developing countries.

Answer 1

Answer:

The answer is: Vernon's Product Life Cycle theory

Explanation:

Product Life Cycle theory was developed to describe the observed pattern of the international trade. This theory was given by Raymond Vernon and the Product Life Cycle has four stages:

1. The introduction stage: Introducing or launching new product in the local market.

2. The growth stage: Strong demand of products and increase in the sales, which increases the profits. The product are exported to other high-income developed countries.

3. The maturity stage: The production is moved to the developed countries.

4. The decline stage: The production of the products begins moves in the low-wage developing countries.