Trade and Investment Integration and International Trade Theory Innovation

 Abstract This paper analyzes the economic globalization, trade and investment integration in the phenomenon of the traditional challenges of international trade theory, put forward in the future development of international trade theory, some ideas, the main contents include: international trade based on comparative advantage will be changed to number of multinational corporations and international integration of resources within the competency-based competitive advantage; international trade pattern in the current company will be intra-industry trade between the giant multinational corporations in the development of intra-industry trade, intra-firm trade in the proportion of high precision parts and components will continue to increase; the dynamic benefits of international trade interests in the increasing prominence of a country to international trade is more emphasis on trade on employment, technological progress, tax, GDP and other promotion role; protection of trade policy increasingly difficult to determine the object of protection, protection effect of increased uncertainty, global competition policy has more advantages; economic integration organizations decreased discrimination, openness increases.〗 〖Keywords trade and investment integration of theoretical innovation in international trade since the 90s of the 20th century, economic globalization, one of the trend of world economy. Its main feature is the various countries and regions worldwide, the increasing integration of economic and production factors, especially capital in the global round, free-flowing, so the economic development of countries and regions with the outside world economy changes in the growing interaction and mutual restraint, the increasing integration of trade and investment. the rapid development of economic globalization, mainly due to the early 90s The end of East-West hostilities essentially dominate the global market economy, to form a truly global market, while scientific and technological progress brought about by the information revolution, the rapid development of communications and transportation, the deepening of international division of labor, WTO and so was the establishment of the waves. Economic globalization has not only greatly promoted the development of world economy and trade, while traditional international economic and trade theory presented many challenges to the theory of innovation and international economic and trade opportunities. This will be discussed, in order to initiate. I, competitive advantage under conditions of economic globalization will replace the traditional comparative advantage as an international the main basis of trade in the international division of labor system of trade theory,UGGs, free trade theory has been dominant, while the theory of comparative cost is the main line of development of free trade theory. comparative cost theory holds that in international trade division, as long as each country to play their comparative advantages, production costs are relatively low in the products to participate in international division of labor, you get comparative advantage, not only its own but the whole world will benefit. then factor endowments theory only from the perspective of general equilibrium analysis of the use of multiple factors to explain the Bijiao cause of cost differences, international trade, . These theories have a common characteristic, that are from an economic point of view that as long as the principle of national compliance costs in the division of labor, to benefit both countries there is no conflict of interest In 1991, U.S. economist Michael. Porter ( Strictly speaking, the management scientist, although he believes he is an economist) Although in his published <that competitive advantage is a country in international competition, winning the key, and elaborated on the determinants of national competitive advantage (Porter, 1991). but the theory is mainly from the management point of view of how a country in international competition Improving the overall competitiveness of war are essentially within the macro-competitive potential, is the further development of the theory of comparative cost. However, under the conditions of economic globalization, comparative cost can no longer be decided in international trade division of the main base (Yinxing, 1997). this matter as it is more cost theory and the factor endowment theory has a crucial factor in the assumption that the non-mobility between countries. It is not as elements of liquidity that led to the comparative cost of different countries, and their impact comparative advantage in one aspect unique to a country, other countries can not be used, the division of labor and trade between countries has become the only way to balance this difference. But in the economic globalization, particularly elements of the flow of capital factor the case of growing, comparative cost advantage to a country which is no longer exclusive, such as a country rich and cheap labor, with capital flows, foreign companies can set up plants to take advantage of the country, repatriation of profits and home country. In this case, a country's comparative advantage has actually become the domestic and foreign can make use of geographical advantages. Who can use? are domestic enterprises, or foreign companies? That depends on which country has an international competitive business.