Vernon's Product Cycle Theory: International Investment & Trade | 1966 Explanation

"Vernon's Product Cycle Theory: International Investment & Trade in 1966" - Raymond Vernon's 1966 theory explains how international investment and trade play a role in a product's lifecycle, which is divided into three stages: new, mature, and decline. In the new stage, innovative nations produce and export. As the product matures, production costs rise, and innovative nations lose their advantage, leading to international investment and shifting production to lower-cost countries. Finally, in the decline stage, innovative nations become importers. This theory highlights the changing roles of international investment and trade throughout the product's lifecycle, demonstrating how innovation and technological advancements drive economic development. Its influence is significant in international economics and business.