The Theory of Comparative Advantage begins by assuming that a given firm first becomes established in its home country and may subsequently penetrate foreign markets via geographic or product differentiation.

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The Theory of Comparative Advantage, developed by David Ricardo, focuses on the benefits of countries specializing in the production of goods for which they have a lower opportunity cost, rather than on the establishment and expansion strategies of individual firms.

The Theory of Comparative Advantage Begins by Assuming That a Given