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Domestic Markets and International Competitiveness

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Author Info

  • Ashish Arora

    (Carnegie Mellon University)

  • Alfonso Gambardella

    (University of Urbino)

Abstract

DOMESTIC MARKETS AND INTERNATIONAL COMPETITIVENESS This paper develops a theoretical and empirical model to analyze the effects of the size and nature of domestic markets on the international competitiveness of national industries. We validate our theory using data on the more than 20,000 plants in the sector producing engineering services for petrochemical plants. Our analysis suggests that the (relative to the US) competitiveness of European or Japanese industries is greater in activities whose underlying competencies can be utilized repeatedly across products instead of being confined to well defined product category. Put differently, the cost penalty due to the fragmented European markets is the least in the case of activities based on generic competencies, and the greatest for activities based on product specific competencies. Keywords: International competition, market size, competencies, engineering industry

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File URL: http://128.118.178.162/eps/io/papers/9605/9605001.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 9605001.

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Length: 44 pages
Date of creation: 27 May 1996
Date of revision:
Handle: RePEc:wpa:wuwpio:9605001

Note: Type of Document - PS; prepared on IBM PC ; to print on PostScript; pages: 44; figures: included/request from author/draw your own
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Web page: http://128.118.178.162

Related research

Keywords: international competitiveness; market size; product specific assets; engineering services; chemical industry;

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References

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  1. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
  2. Teece, David J. & Rumelt, Richard & Dosi, Giovanni & Winter, Sidney, 1994. "Understanding corporate coherence : Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 23(1), pages 1-30, January.
  3. Gambardella, Alfonso & Torrisi, Salvatore, 1998. "Does technological convergence imply convergence in markets? Evidence from the electronics industry," Research Policy, Elsevier, vol. 27(5), pages 445-463, September.
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Cited by:
  1. Catherine Matraves & Laura Rondi, 2005. "Product Differentiation, Industry Concentration and Market Share Turbulence," CERIS Working Paper 200514, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  2. Suma Athreye, 1997. "On Markets in Knowledge," Journal of Management and Governance, Springer, vol. 1(2), pages 231-253, June.

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