Final answer:
Porter's 1990 study focused on the concept of comparative advantage, analyzing how nations develop an absolute advantage in certain industries based on efficiency, cost, geography, education, and technology, impacting international trade and specialization.
Step-by-step explanation:
The crux of Porter's 1990 study on national competitive advantage is best understood through the concept of comparative advantage. One of the key elements detailed in this study is how a country can specialize in producing certain goods or services more efficiently than others, potentially leading to an absolute advantage in certain industries. For example, in a hypothetical scenario where two countries produce green beans and tomatoes, one country may have the absolute advantage in producing green beans if it can produce them at a lower cost and more efficiently than its trading partner. Similarly, the other country may have an advantage in tomatoes. The study also suggests that factors such as geography, education, and technology can influence these advantages.
Furthermore, examining opportunity costs can provide a clearer understanding of comparative advantages. For instance, if producing a sweater in France requires less sacrifice in terms of foregone wine production compared to Tunisia, France has a lower opportunity cost for producing sweaters. This indicates that France holds a comparative advantage in sweater production. Economic theories such as this underpin international trade policies and have real-world implications for how countries manage trade, specialization, and economic development.