SDA Professor of Strategic and Entrepreneurial Management
We do arbitrage all the time. Our daily routines consisting of private and work-related decisions are all about measuring and comparing the differences. An online purchase of a car insurance via a quote calculator: price arbitrage. Choosing a certain restaurant with a dinner with friends: benefits arbitrage. Using public transport vs. car: time arbitrage. Delocalization of an assembly line to an emerging market: labour cost arbitrage. Delocalization of an R&D centre close to a university hub: knowledge arbitrage.
To large extent, globalisation processes are all about arbitrage too – resources, products and services are shifted among countries in attempt to capture the opportunities arising from the differences among markets.
Digital networks, reducing barriers to international markets and connecting companies at the global level, have become a major catalyst of cross-border arbitrages.