The new trade theory suggests that a country may predominate in the export of a good simply because it was lucky enough to have one or more pioneering firms to produce that good.

Question

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The new trade theory suggests that early leading firms in a country that produce a particular good can create momentum and advantages for that country in terms of export of that good. This suggests that luck or chance can play a role in a country's dominance in the export of a particular good.

The New Trade Theory Suggests That a Country May Predominate