Allergic To Diamox Alternative

The internationalization of business

Published 03/03/2011

the

Matthieu Crozet and Lionel Fontagne, " Internationalization of companies: a microeconomic analysis of globalization " Economics and Statistics, 435-436, INSEE, March 2011.

research in international economics was long limited to macroeconomic and sectoral studies. When she has used trade data at very fine product, these data still aggregating different firms export or import at national level. By deviating from the international trade models with typical firm, the theoretical developments made since the early 2000s opened the way for a more micro-economic analysis of international trade. On this basis, the use of individual data on trade and international investment is meaningless. These micro-economic analysis of international trade provide a new perspective on globalization, not least by showing that even in a country as open to trade than France, export is not at all easy and commonplace, so that trade in large countries is that, essentially, a few large companies that have overcome challenges of internationalization.

Increased international trade in goods, and to a lesser degree of services, is undoubtedly one of the major upheavals that have marked the global economy in recent decades. The ratio of international trade in goods and services to global GDP, as recorded by the balance of payments, now significantly exceeds the 30%, whereas it was below 13% in the early 1970s. Is it still a restrictive view of the phenomenon, especially since the production and sale establish subsidiaries abroad is not recognized in balance of payments.

Thus, globalization is a macroeconomic phenomenon so visible everywhere you might think, and binding on all. However, the micro-economic data return a more nuanced picture of reality. The analysis of microeconomic data of international trade highlighted some statistical regularities original: in all countries, developed or emerging economies, the proportion of firms directly involved in an international relationship is very strong minority. It rarely exceeds 20%. In addition, most exporters have a very limited presence on world markets, being active on a few markets, adjacent to their country of origin (over 40% of French exporters, for example, serve only a single destination).

Although globalization is a major macroeconomic phenomenon, even though economists and policymakers have become used to address issues of competitiveness in terms of a competition between nations, not countries trade with each other, but businesses. Based on new theoretical tools, and original individual data, recent developments of research in international economics restore the balance, leaving more room for micro-economic analysis of globalization.

work opens new avenues for the conduct of economic policy. Specifying the consequences of trade openness for each company, identifying the specific difficulties that hinder the internationalization of firms or by observing the nature of their strategic choices, such work can better reflect the implications of trade policies and their limits. Thus France, like many other countries, offers answers that are much more micro than macroeconomics. Evidenced by the succession of measures to support businesses (especially SMEs) abroad, and policies of clusters that show the desire to give companies the means to cope with foreign competition and access global markets. However, and although some work has already begun, a systematic quantitative assessment of these policies remains to be done.

soon as we take into consideration the fact that all businesses have different cards to take advantage of trade opening and response to, the consequences of globalization have nothing trivial. On the one hand, the lowering of trade barriers, whatever their nature, must allow development of national exports, either by increasing the number of exporting firms or by higher sales of each exporter in place . On the other hand, opening markets to international competition requires each to respond.

Few companies are able to respond positively the new opportunities offered by the opening of global markets. Beyond the formal trade protection, it seems that companies are facing a set of concrete barriers that prohibit their access to exporter status. There is, obviously, a major task for economic policy. We note in passing that this is not simply seek to maximize, in a mercantilist approach, the number of exporters and the overall amount of exports, but to identify the constraints limiting the expansion capabilities of firms so to give them the tools necessary to develop and take advantage of opportunities offered by globalization. These constraints may weigh on demand (this is the case for example in the presence of restrictive regulations on export markets), but also the offer, especially when it comes to fund access exporter status.

http://www.contrepoints.org/?p=15646