Question

A good example of demand conditions that lead to a home-country advantage is

A. Huawei's investment in cellular phones in developing nations based on the increased demand for the product in China.

B. Switzerland's technical dye industry that has largely contributed to the success of its pharmaceutical industry.

C. Italy's ceramic industry booming after World War II owing to low barriers to entry in the market.

D. The construction of national highways in the United States that paved the way for the increase in the use of automobiles in that country.

E. The Korean government's strong supports of basic and advanced educational institutions that prepare workers with IT skills.

Answer 1

Switzerland’s technical dye industry that has largely contributed to success of its pharmaceutical industry.

A home-country advantage would be where one industry is complemented by the core competency of the home country in terms of another home-based industry. The benefit would be an increase in cost-savings and operational efficiencies. The technical dye industry of Switzerland which has a large contribution in its Pharmaceutical industry is a good example of home-country advantage.