The new trade theory began to emerge in the 1970s when a number of economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade.

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The new trade theory began to emerge in the 1970s when a number of economists pointed out that the ability of firms to attain economies of scale might have important implications for international trade.Economies of scale are unit cost reductions associated with a large scale of output.

The New Trade Theory Began to Emerge in the 1970s