A
domestic market is a financial market. Its trades are aimed toward a
single market. A domestic market is also referred to as domestic trading. In
domestic trading, a firm faces only one set of competitive, economic, and
market issues and essentially must deal with only one set of customers,
although the company may have several segments in a market. And also defined
as the customers of a business who live in the country where the business
operates.
There are certain limitations when
competing in a domestic market, many of which encourage firms to expand
abroad. The main reasons why a business would decide to expand abroad is
down to a limited market size and limited growth within the domestic market.
Korea
The Korean domestic market, (KDM)
is the name for Korea's economic market for Korean-brand goods, chiefly
automobiles and parts. Korea's exportation market resides mainly in the
United States and Canada. While the United States often uses an original
equipment manufacturer (OEM) for assembly, the KDM makes all its products
under their own brand.
United States
Many have argued that the causes
of the Revolutionary War were mostly economic. There were many advantages
that the colonists enjoyed, while living in British colonies. The colonists
were rarely if ever asked to pay taxes, and their domestic economic
activities took place without much interference from Britain. The main
regulation that the British Empire really enforced was that the colonists
take part in foreign trade, only as outlined by the Navigation Acts. These
Navigation Acts required that goods from the colonies be shipped on boats
that were owned by England, and even that some ships be routed through
Britain regardless of the final destination.
When Britain refused to
acknowledge the rights of their colonists, the Americans decided to boycott
the use of goods that were imported from Britain. Americans were fighting
for the right to elect their own representatives to be responsible for
taxing them. Britain did not respond favorably to their boycott, and
instead, levied new taxes and created new laws for the colonists. These were
known as the Intolerable Acts of 1774. In defiance of the will of Britain,
the American colonists launched a revolution that won them their
independence.
After independence, the Americans
struggled to implement an effective system of government that all of the
states could agree was best for their new nation. During the war, under the
Articles of the Confederation, Congress was given the right to declare war
and conduct foreign affairs, but they were not given the ability to levy
taxes or to regulate commerce. The new national government that emerged
after the Revolutionary War had a host of new problems to consider. There
was the issue of not having a currency, the lack of power to levy taxes, the
unavailability of government revenues to pay back debts, and the barriers to
domestic trade. The states were charging each other tariffs during trade.
Because of these and other issues, they decided that they needed to revise
the Articles of Confederation.
Leaders such as Benjamin Franklin
and Thomas Jefferson were strong proponents of free trade. They believed
that in order for their young nation to succeed, America needed unrestricted
access to foreign markets. The only way that they were going to be able to
achieve that is if they were also willing to offer reciprocal and open
access to all nations. With policies like this, America would receive
much-needed manufactured goods. Their goals were called into question by
naysayers such as Alexander Hamilton. He was a “protectionist”, and believed
that America should implement a tariffs and subsidies that protected
American manufacturing . Hamilton was interested in the long-term growth of
the American economy.
Hamilton’s analysis of free trade
and his endorsement of protectionist policies were justified by the War of
1812. During that time, European nations violated American trade. This was
followed by an upswing in nationalism. Leaders such as Henry Clay promoted a
stronger base for domestic manufacturing. He called it the “American
System”, and it served to put the interests of the new nation and its
manufactures before others. This “American System” was the shape of the
American economic policy until the Great Depression. The American policy
makers realized early that free trade did not serve in the best interests of
the new nation, and they created barriers to trade to protect themselves.
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