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European integration: the third step

Published on Nov 19, 2007in International Economics and Economic Policy
· DOI :10.1007/s10368-007-0089-1
Harry P. Bowen17
Estimated H-index: 17
(Queens University of Charlotte),
Leo Sleuwaegen22
Estimated H-index: 22
(CUA: The Catholic University of America)
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Abstract
A perception of declining EU competitiveness has intensified calls for structural reforms within the EU. This paper examines recent evidence on changes in relative EU competitiveness and considers the observed changes in relation to the evolving competitive environment facing EU firms. Our analysis suggests that recent declines in EU competitiveness reflect changes (or lack thereof) within the EU in response to an evolutionary “Third Step” in the process of EU integration: global market integration. Starting from the mid-1990s, we find that the EU began to face unprecedented increases in external sources of competition. The rising competition from external sources and declining export market competitiveness created pressures for EU firms to alter their organizational and product market strategies to meet the challenge of a globally integrating market. While many leading EU firms have responded to this challenge, most EU firms remain hampered by anachronistic EU product and labor market regulations that have inhibited adjustments that could better restore the competitiveness of EU based firms. In particular, our analysis points to labor market rigidities and limited growth in the services sector as factors limiting adjustment to the realities of a global market. The growing calls for structural reforms therefore reflect the rising external competitive pressures on EU firms as they attempt to respond to growing global competition.
  • References (13)
  • Citations (12)
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References13
Newest
Published on Feb 1, 2008in Strategic Management Journal5.57
Margarethe F. Wiersema24
Estimated H-index: 24
(UCI: University of California, Irvine),
Harry P. Bowen17
Estimated H-index: 17
(Queens University of Charlotte)
The globalization of markets and industries has fundamentally changed the competitive conditions facing firms. Yet, how globalization has influenced the international diversification strategies of firms is an issue largely overlooked in both the strategic management and international business literatures. This paper develops a theoretical framework to understand how industry globalization, foreign competition, and firm product diversification may influence a firm's choice of its degree and scope...
Published on Dec 1, 2005in Strategic Management Journal5.57
Harry P. Bowen17
Estimated H-index: 17
(Katholieke Universiteit Leuven),
Margarethe F. Wiersema24
Estimated H-index: 24
(UCI: University of California, Irvine)
Since the mid-1980s U.S. domestic firms have faced significant increases in foreign-based (i.e., import) competition as reductions in barriers to international commerce have resulted in markets and industries becoming increasingly global. Despite the growing and widespread importance of foreign-based competition, the influence that such competition may exert on corporate diversification strategy is a question largely overlooked in the strategic management literature. This paper examines the impa...
Published on May 11, 2005
Margarethe F. Wiersema3
Estimated H-index: 3
,
Harry P. Bowen17
Estimated H-index: 17
(Katholieke Universiteit Leuven)
Significant reductions in barriers to international commerce since the mid-1970s have resulted in markets and industries becoming increasingly integrated across nations. A key consequence of industry globalization has been substantially increased levels of foreign competition in the markets of most nations, and in particular in the U.S. marketplace. The changes in competitive conditions facing firms as markets and industries become more globalized are significant economic phenomena that can be e...
Published on Jan 1, 2005
Paolo Passerini2
Estimated H-index: 2
(Eurostat),
Antonia Margherita4
Estimated H-index: 4
(Eurostat)
+ 1 AuthorsKonstatia Petridou1
Estimated H-index: 1
(Eurostat)
Published on Jun 21, 2004
Isabelle De Voldere , Leo Sleuwaegen22
Estimated H-index: 22
+ 1 AuthorsReinhilde Veugelers28
Estimated H-index: 28
(Katholieke Universiteit Leuven)
This article traces the changing impact of national differences on the geographical and industry diversification strategy of leading firms in Europe in 1987-2000, a period of intensified European integration. The results indicate that, whereas country of origin had a significant effect at the beginning of the period, its impact has gradually diminished over time, with firms overall focusing resources on core activities but at the same time expanding production more internationally. However, some...
Published on Jan 1, 2004
William W. Lewis2
Estimated H-index: 2
The disparity between rich and poor countries is the most serious, intractable problem facing the world today. The chronic poverty of many nations affects more than the citizens and economies of those nations; it threatens global stability as the pressures of immigration become unsustainable and rogue nations seek power and influence through extreme political and terrorist acts. To address this tenacious poverty, a vast array of international institutions has pumped billions of dollars into thes...
Published on Jan 1, 2003
Marcel P. Timmer34
Estimated H-index: 34
,
Gerard Ypma4
Estimated H-index: 4
,
Bart van Ark31
Estimated H-index: 31
(UG: University of Groningen)
This paper analyses the contributions of IT-capital deepening and total factor productivity growth (TFP) in IT-production on aggregate labour productivity growth patterns within the European Union in comparison with the US. We find that differences in the direct effects of IT almost fully explain the US lead in labour productivity growth over the EU aggregate over the period 1995-2001. However differences in the direct effects of IT are by no means the sole determinants of the widening of the "A...
Published on Jan 1, 2001
Leo Sleuwaegen22
Estimated H-index: 22
,
Reinhilde Veugelers28
Estimated H-index: 28
+ 2 AuthorsK Rommens1
Estimated H-index: 1
Published on Jan 1, 2000
Marion Jansen11
Estimated H-index: 11
This paper presents a discussion of the potential channels through which international trade affects the position of low skilled workers in the European Union. After an analysis of the European Union's trade flows showing the predominant role of intra-industry trade with other industrialised countries, the discussion focuses on the potential effects of intra-industry trade on low skilled labour. Particular attention is paid to possible interactions between trade and technological change and to t...
Published on Jan 1, 2000
Grazia Ietto-Gillies8
Estimated H-index: 8
,
Meloria Meschi2
Estimated H-index: 2
,
Roberto Simonetti8
Estimated H-index: 8
Cited By12
Newest
Published on Jan 1, 2012
Harry P. Bowen17
Estimated H-index: 17
,
Abraham Hollander10
Estimated H-index: 10
,
Jean-Marie Viaene1
Estimated H-index: 1
Published on Oct 1, 2011in Journal of Regional Science1.94
Harry P. Bowen17
Estimated H-index: 17
(Queens University of Charlotte),
Haris Munandar5
Estimated H-index: 5
(UI: University of Indonesia),
Jean-Marie Viaene13
Estimated H-index: 13
(EUR: Erasmus University Rotterdam)
A belief that EU integration is incomplete is often predicated on a comparison to U.S. states. Yet, with low barriers to trade and factor mobility between EU countries, is this belief correct? To address this question, we develop three theoretical predictions regarding the distribution of output and factors across members of an integrated economic area with harmonized policies and free movement of goods and factors. Empirical tests strongly support these predictions for U.S. states and 14 EU cou...
Published on Jun 1, 2011
Cherry Cheung (Hogeschool-Universiteit Brussel), Kristien Coucke1
Estimated H-index: 1
(Hogeschool-Universiteit Brussel),
Daniel Neicu (Hogeschool-Universiteit Brussel)
The paper presents a logical decision tree structure to screen industries for possible malfunctioning using a strategic set of indicators reflecting potential, international and internal competition. Based on this conditional combination of a limited set of important indicators associated with limited competition and market malfunctioning in industries, we classify industries into different groups with a low or high probability that market malfunctioning is present.
Published on Jan 1, 2010
Harry P. Bowen17
Estimated H-index: 17
(Queens University of Charlotte),
Haris Munandar1
Estimated H-index: 1
(Bank Indonesia),
Jean-Marie Viaene13
Estimated H-index: 13
(EUR: Erasmus University Rotterdam)
This discussion paper led to a publication in the Journal of Regional Science , 2011, 51(4), 653-677. European economic integration is commonly believed to be incomplete, and that further reforms are needed. In this context, the union of U.S. states is considered the benchmark of complete economic integration and is often the basis for comparison regarding the extent of E.U economic integration. Yet, with low trade barriers and with productive factors at least notionally mobile across E.U. count...
Published on Sep 1, 2009in Journal of International Business Studies7.72
Thomas Hutzschenreuter16
Estimated H-index: 16
(WHU - Otto Beisheim School of Management),
Florian Gröne5
Estimated H-index: 5
(WHU - Otto Beisheim School of Management)
What happens when multinational enterprises (MNEs) face competition in their own home market from imports or through foreign direct investment (FDI)? We provide a differentiated assessment of the influence of these two types of foreign competition on the product and geographic scope of MNEs. We apply the awareness–motivation–capability framework to international business (IB), hypothesizing that an increase or decrease in scope depends on the motivation and ability of an incumbent firm to respon...
Published on Mar 1, 2009in Journal of Management Studies5.84
Thomas Hutzschenreuter16
Estimated H-index: 16
(SPbU: Saint Petersburg State University),
Florian Gröne1
Estimated H-index: 1
(SPbU: Saint Petersburg State University)
This study contributes to the emerging body of research into the influence of foreign competition on firm scope. Industrial organization economics, the resource-based view of the firm, and transaction cost economics consistently predict vertical de-integration in the face of intensifying pressure from imports and foreign direct investment. We show this was the case for 407 US firms between 1987 and 2003. Results for a panel of 95 German firms reveal a similar reaction to pressure from an increas...
Published on Dec 1, 2008in Journal of International Business Studies7.72
Kristien Coucke1
Estimated H-index: 1
(Catholic University of Leuven),
Leo Sleuwaegen22
Estimated H-index: 22
(Katholieke Universiteit Leuven)
This paper analyzes the impact of globalization on the exit behavior of manufacturing firms in Belgium. Imports from low-wage countries are found to exert a strong competitive effect, which raises the likelihood of exit of firms in industries where intra-industry trade is relatively low. Similar to import competition, growing penetration by multinational firms in the industry has an equally strong competitive impact on the likelihood of exit of domestic firms. However, Belgian firms that offshor...
Published on Apr 23, 2007
Kristien Coucke3
Estimated H-index: 3
,
Leo Sleuwaegen22
Estimated H-index: 22
(Katholieke Universiteit Leuven)
This paper analyzes the impact of globalization on the exit behavior of manufacturing firms in one of the world’s most open economies: Belgium. We find that imports from low-wage countries exert a strong competitive effect that lowers a firm’s chances of survival. This competitive effect is found to arise mainly in industries where intra-industry trade, an indicator of product differentiation, is relatively low. As an offensive strategy to cope with the rising competitive pressure from imports, ...
Published on Jan 1, 2006
Kristien Coucke3
Estimated H-index: 3
,
Leo Sleuwaegen22
Estimated H-index: 22
View next paperEconomic Reform and the Process of Global Integration