Global Forces behind New Forms of Internationalization

  • Silvio Borner

Abstract

The transition process within the world economy has been dubbed a phase of “international economic disorder” (Helleiner, 1980) or a “non-system” (Williamson, 1985). This phase, following the break-down of the Bretton Woods exchange-rate system on the one hand and the weakening of the GATT-related free trade arrangement on the other, is leading to a new kind of world order. This new order, of course, resembles neither the phantom of the propagandists of a “New Economic Order” nor the ideals of free world markets for goods, services, capital, and resources of all kinds. Since both camps — “the new economic order propagandists” as well as the “free trade champions” — carry a heavy ideological cargo, some systematic clarification is badly needed. This is quite clearly recognized in the case of the first group, but quite often covered up behind the tenets of scientific objectivity in the case of the latter. At the government level there is a wide cleavage between the rhethoric and the deeds, but this is even more true of private entrepreneurs, many of whom are protectionist — if not in their minds then at least in their hearts. Specifically, some representatives of multinational corporations have shown strong resentment against “New Forms of Internationalization”, arguing that NFI are Trojan horses destined to serve socialist-inspired changes in the world economic order: away from a free and open market and towards bilateral bureaucratic arrangements. Do these entrepreneurs not see what is so evident and so aptly phrased by Caves (1982:36) that “forces restricting trade encourage foreign investment”? In a world of purely free trade, there would simply be no need and no room for multinational corporations. Their very existence is the consequence of market imperfections (mostly government restrictions on trade) and strategic potential (mostly monopolistic advantages). Caves’ verdict can be equally applied to the new forms. Forces restricting trade and foreign investment encourage NFI. NFI are the symptoms of these new forces, not exogenously imposed modes of international operations. Inasmuch as these forces are — from the point of view of the firm — detrimental to their interests, it is quite understandable that the managers affected resent these developments. But such a point of view does not suffice to reshape company strategy or to redirect economic policy.

Keywords

Transportation Radar Marketing Expense Arena 

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Copyright information

© Springer-Verlag Berlin Heidelberg 1986

Authors and Affiliations

  • Silvio Borner
    • 1
  1. 1.Institut für Angewandte WirtschaftsforschungUniversität BaselBaselSwitzerland

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