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The globalization of markets and regional integration

  • International Competition
  • Published:
Intereconomics

Abstract

The 1980s have witnessed the globalization of markets and an intensified international competition. The rise of the newly industrializing countries and the growth of multinational enterprises—developing parallely to foreign direct investments—have contributed considerably to this trend. However, there are factors suggesting that the intensification of market competition might be only a transitory phenomenon.

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References

  1. cf. R. Z. Lawrence: Imports in Japan: Closed Markets or Minds?, Brookings Papers on Economic Activity, 1987, pp. 517–548.

  2. cf. P. J. J. Welfens: Growth, Innovation and International Competitiveness, in: INTERECONOMICS, Vol. 22, No. 4, 1987, pp. 168–174; K. Z. Poznanski: Technology, Competition & the Soviet Bloc in the World Market, Berkeley (Institute of International Studies) 1987; D. Cassel: Wirtschaftssysteme im Umbruch, München 1989.

  3. Cf. Deutsche Bundesbank: Patent-und Lizenzverkehr mit dem Ausland Sowie sonstiger Austausch von technischem Wissen durch Dienstleistungen in den Jahren 1986 und 1987, in: Monatsberichte der Deutschen Bundesbank (Bundesbank Monthly Report), No. 40 (May 1988), pp. 39–69.

  4. Cf. UNCTC: Transnational Corporations and World Development, New York 1988, pp. 24 f.

  5. Cf. N. Kobayashi: Japanese Intervention with Respect to Direct Foreign Investment, in: Direct Foreign Investment, New York 1987, pp. 95–107; D. I. Okimoto: Outsider Trading: Coping with Japanese Industrial Organization, in: K. B. Pyle (ed.): The Trade Crisis. How Will Japan Respond?, Seattle (Society for Japanese Studies) 1987, pp. 85–116.

  6. Figures taken from UNIDO: Industry and Development. Global Report 1988/89, Vienna 1988, p. 19.

  7. The chief motive for the NUMMI project from the US point of view was to learn Japan’s more efficient production methods for small cars and to attempt to improve quality control and productivity by testing different ways of “Japanizing” the organization of production; on this, see J. Langenfeld, D. Schefman: Innovation and U.S. Competition Policy, in: Außenwirtschaft, 43 (1988), pp. 45–95.

  8. see: Council of Economic Advisers: Economic Report of the President, Washington, D.C., 1988, Chap. 3.

  9. On the supply-side stability strategy of the USA and other industrial nations during the 1980s, see P. J. J. Welfens: Theorie und Praxis angebotsorientierter Stabilitätspolitik, Baden-Baden 1985; P. J. J. Welfens: Angebotsorientierte Stabilitätspolitik: Probleme, Erfahrungen, Perspektiven, in: Konjunkturpolitik, 33 (1987), pp. 185–210.

  10. On the distinction between horizontal, vertical and diagonal innovation, and on the discussion concerning the importance attached to technology policy, see P. J. J. Welfens: Innovationstheorie,-politik und-dynamik im Systemvergleich, in: P. J. J. Welfens, L. Balcerowicz (eds.): Innovationsdynamik im Systemvergleich, Heidelberg 1988, pp. 1–27.

  11. On the growing importance of intangible investment, see: OECD: Structural Adjustment and Economic Performance, Paris 1987, p. 168.

  12. Gesetz gegen Wettbewerbsbeschränkungen (GWB). For the discussion on EC merger surveillance in the context of the planned fifth revision of the GWB, see in particular: Monopolkommission: Siebentes Hauptgutachten der Monopolkommission 1986/87, Bonn 1988; G. Meier: GWB-Novelle und Europäischer Binnenmarkt, in: Wirtschaft und Wettbewerb, 38 (1988), pp. 722–732; Monopolkommission: Conception of a European Merger Control, Baden-Baden 1989.

  13. On the exempted areas in EC competition policy and their effects on third countries, see H. Dicke et al.: EG-Politik auf dem Prüfstand, Tübingen 1987.

  14. On the erosion of the principles of the GATT and discussions on reform, see H. Kitamura: GATT and Conflict Management, Duisburg (mimeo) 1988; on the trade policy disputes between the USA and the EC, see R. E. Baldwin, C. B. Hamilton, A. Sapir (eds.): Issues in US-EC Trade Relations, Chicago 1988.

  15. The significance of sunk costs as barriers to market entry is stressed in contestable market theory; see W. J. Baumol, R. D. Willig: Fixed Costs, Sunk Costs, Entry Barriers and Sustainability of Monopoly, in: Quarterly Journal of Economics, 96 (1981), pp. 405–431.

  16. On strategic trade theory, see: P. Krugman: Import Protection as Export Promotion: International Competition in the Presence of Oligopoly and Economies of Scale, in: H. Kierzkowski (ed.): Monopolistic Competition and International Trade, Oxford 1984, pp. 180–206. R. Baldwin: Evaluating Strategic Trade Policy, in: Außenwirtschaft, 43 (1988), pp. 207–230; P. R. Krugman (ed.): Strategic Trade Theory and the New International Economics, Cambridge, Mass. 1986. The first consistent formulation of the arguments of strategic trade policy in terms of a theoretical model can be found in J. Brander, B. Spencer: International R & D Rivalry and Industrial Strategy, in: International Review of Economic Studies, 50 (1983), pp. 707–722. On the empirical evidence, see. R. Feenstra (ed.): Empirical Research in International Trade, Cambridge, Mass. 1987.

  17. This lesson from the problems arising under the Bretton-Woods system, also noting the complementarity of the GATT regulatory system and the acitivities of the IMF, is stressed by A. Gutowski: Internationale Währungsordnung und weltwirtschaftliche Entwicklung, in: H. Giersch (ed.): Probleme und Perspektiven der weltwirtschaftlichen Entwicklung, Berlin 1985, pp. 307–332, esp. p. 318.

  18. The fact that the international competitive order and international competition policy have the quality of a collective good is also a major reason behind the failure of earlier attempts at reform such as the League of Nations proposals on the question of international cartels; see H. Gröner: Internationale Wettbewerbspolitik, in: M. Borchert, U. Fehi, P. Oberender (ed.): Markt und Wettbewerb, Berne 1987, pp. 359–377, esp. p. 360.

  19. On this, see D. Cassel, B.-T. Ramb, H.J. Thieme (eds.): Ordnungspolitik, Munich 1988; P. J. J. Welfens: Internationalization of the Economy and of Economic Policies, Heidelberg 1990 (forthcoming).

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  1. University of Duisburg, West Germany

    Paul J. J. Welfens

  2. American Institute for Contemporary German Studies/Johns Hopkins University, Washington, USA

    Paul J. J. Welfens

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Welfens, P.J.J. The globalization of markets and regional integration. Intereconomics 24, 273–281 (1989). https://doi.org/10.1007/BF02924734

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