New trade theory is in line with the theory of ________ but at odds with ________ theory.

Question

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New trade theory emphasizes that economies of scale, network effects, and first-mover advantage can lead to trade and specialization even in the absence of differences in factor endowments. This is in line with the theory of international product life cycle, which emphasizes product differentiation and innovation as drivers of trade. However, it is at odds with the traditional theory of comparative advantage, which relies solely on differences in factor endowments. The theory of factor proportions emphasizes differences in factor endowments as the main driver of trade. The idea of national competitive advantage, developed by Michael Porter, builds on new trade theory by arguing that a nation's competitiveness in certain industries is a function of a range of factors beyond just factor endowments, such as the quality of institutions, the availability of skilled labor, and the level of infrastructure.

New Trade Theory Is in Line with the Theory of ________