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Globalisation of production and markets


  • Nunnenkamp, Peter
  • Gundlach, Erich
  • Agarwal, Jamuna Prasad


Since the 1980s, competitive pressure has increased in the world economy. In addition to traditional trade flows, the globalisation of production and markets has greatly enhanced the complexity of the international division of labour. Declining transaction and information costs have stimulated the fragmentation of production processes on a worldwide scale and the relocation of noncompetitive industries. As a result, in both industrialised and developing countries, newly emerging competitors have increasingly challenged established suppliers. The aim of this study is threefold. First, the authors portray the trend towards globalisation and assess by which means enterprises have gone global. Second, they discuss the adjustment needs of traditional producers by evaluating the consequences of globalisation on trade, production, employment and wages. Third, they analyse whether the economic policy reactions to globalisation in industrialised countries are adequate to deal efficiently with competitive challenges. It turns out that the scope of national policies has been significantly reduced by globalised production and markets, while corporate strategies have increasingly been less constrained. Consequently, major policy revisions are indispensable. Most importantly, governments in industrialised countries should focus their attention on human capital formation, rather than on defensive trade policies, whose effectiveness has been seriously eroded. This study is part of a research project on "The Social Market Economy: Challenges and Conceptual Response".

Suggested Citation

  • Nunnenkamp, Peter & Gundlach, Erich & Agarwal, Jamuna Prasad, 1994. "Globalisation of production and markets," Open Access Publications from Kiel Institute for the World Economy 807, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkie:807

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    References listed on IDEAS

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    2. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
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    6. David Greenaway & Robert C. Hine, 1991. "Intra-Industry Specialization, Trade Expansion and Adjustment in the European Economic Space," Journal of Common Market Studies, Wiley Blackwell, vol. 29(6), pages 603-622, December.
    7. Steven Globerman & James Dean, 1990. "Recent trends in intra-industry trade and their implications for future trade liberalization," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 126(1), pages 25-49, March.
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    11. repec:bin:bpeajo:v:24:y:1993:i:1993-2m:p:161-226 is not listed on IDEAS
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    Cited by:

    1. Siebert, Horst, 1996. "Die Weltwirtschaft im Umbruch: müssen die Realeinkommen der Arbeitnehmer sinken?," Kiel Working Papers 744, Kiel Institute for the World Economy (IfW).
    2. Siebert, Horst, 1997. "Die Illusion von der Kooperation: zum Wettbewerb in der Weltwirtschaft gibt es keine Alternative," Kiel Working Papers 809, Kiel Institute for the World Economy (IfW).
    3. Nunnenkamp, Peter, 1998. "Die deutsche Automobilindustrie im Prozeß der Globalisierung," Open Access Publications from Kiel Institute for the World Economy 1790, Kiel Institute for the World Economy (IfW).
    4. Nunnenkamp Peter, 1994. "Nach der Uruguay-Runde: Triebkräfte und Sprengsätze für die Weltwirtschaft," Zeitschrift für Wirtschaftspolitik, De Gruyter, vol. 43(1-3), pages 251-270, June.
    5. Naujoks, Petra & Schmidt, Klaus-Dieter, 1995. "Foreign direct investment and trade in transition countries: Tracing links," Kiel Working Papers 667, Kiel Institute for the World Economy (IfW).
    6. Klodt, Henning & Maurer, Rainer, 1996. "Internationale Direktinvestitionen: Determinanten und Konsequenzen für den Standort Deutschland," Kiel Discussion Papers 284, Kiel Institute for the World Economy (IfW).
    7. Gundlach, Erich & Nunnenkamp, Peter, 1997. "Labor markets in the global economy: How to prevent rising wage gaps and unemployment," Kiel Discussion Papers 305, Kiel Institute for the World Economy (IfW).
    8. Nunnenkamp, Peter, 1998. "Lateinamerika nach der verlorenen Dekade: Eine Zwischenbilanz der Reformen," Kiel Discussion Papers 324, Kiel Institute for the World Economy (IfW).
    9. Jürgen Blazejczak (Hrsg.), 1998. "Zukunftsgestaltung ohne Wirtschaftswachstum?: Ergebnisse eines Workshops des DIW im Auftrag von Greenpeace Deutschland," Discussion Papers of DIW Berlin 168, DIW Berlin, German Institute for Economic Research.
    10. Gundlach, Erich & Klodt, Henning & Langhammer, Rolf J. & Soltwedel, Rüdiger, 1995. "Fairneß im Standortwettbewerb? Auf dem Weg zur internationalen Ordnungspolitik," Kiel Discussion Papers 254, Kiel Institute for the World Economy (IfW).

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