Abstract
If international ‘openness’, ‘integration’ and ‘interdependence’ present conceptual problems, the difficulties associated with their measurement often seem to be almost insuperable. Given the sheer magnitude and complexity of the relationships involved in general economic integration (that is, integration covering a wide range of economic activities), no single measure employed to show the degree of integration appears to be entirely satisfactory.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Notes and References
Cf. Dornbusch and Krugman (1976), OECD (1973). Both studies show export prices to be determined much more by domestic costs than by competitors’ prices, which is exactly what one would expect in a world of heterogeneous goods and services.
See, for instance, Kravis and Lipsey (1971, 1978), Isard (1977).
Surveys of the relevant literature are provided by, among others, Aliber (1978), Argy (1981) and Llewellyn (1980).
Kuznets (1966, p. 302).
See also Kuznets (1964 and 1966).
Maizels (1963) includes an analysis of the characteristics of small countries’ trade.
The very high averages for Group III in the upper part of the table and Group V in the lower part are the result of Belgium’s exceptionally high trade ratio for 1979. Incidentally, of the countries included in Table 2.1 two — Libya and Saudi Arabia — are excluded because of the lack of comparable data.
Page (1979, p. 166).
Ibid. See also the table on p. 169.
Kuznets (1964, p. 56).
The group of centrally planned economies in Table 2.4 includes USSR, Bulgaria, Czechoslovakia, East Germany, Hungary, Poland and Rumania.
The table refers only to trade in goods. However, if similar data were available for services they would no doubt show very much the same picture, as this type of trade also tends to be determined predominantly by the level of economic development. Cf. Sapir and Lutz (1981). For an analysis of the difficulties which developing countries are experiencing in developing trade among themselves and their dependence on industrial countries see Havrylyshyn and Wolf (1981).
See Fortune (1972) on the important role which income equalisation plays in the growth of trade.
Grubel and Lloyd (1975), Aquino (1978), Giersch (1979). See also Balassa (1986) for an attempt to quantify the relative importance of a number of factors in the development of intra-industry trade.
Aquino (1978).
Cf. Kuznets (1964), Aquino (1978). It inevitably takes some time before developing countries reach the level of industrialisation which enables them to specialise in a wide range of products and production methods. At the same time, inter-industry trade may remain important for those industrial countries, such as Canada and Norway, which are rich in certain natural resources.
See, for instance, Scherer (1980), Prais (1976). The changes in industrial, national and international forms of organisation caused by technical advances are discussed in Part V.
Cf. Aquino (1978), Grubel and Lloyd (1975).
Kuznets (1966). Sen (1984) contains a survey of the relevant empirical literature as well as an analysis of the reasons for these similarities.
See, for instance, Pryor (1972) and Hughes (1976).
According to Dunning (1981a, p. 436): ‘intra-industry and intra-firm direct investment tends to be greatest in the sectors in which [transnational corporations] possess the type of ownership advantages which is best exploited internally rather than by way of licensing, management contracts, franchise and technical service agreements etc’. He also found evidence that ‘patterns of direct investment may lag those of trade’ (ibid., p. 434).
Cf. Stopford, Dunning and Haberich (1980), United Nations (1978 and 1981), Stopford and Dunning (1983).
See, for instance, Frobel, Heinrichs and Kreye (1980). There is certainly evidence that the industries in which transnationals are active show not only the highest levels of intra-industry international direct investment and trade but also the highest levels of intra-firm trade. Cf. Dunning and Pearce (1981), Dunning (1981a) and, particularly, Casson and Associates (1986).
Lack of relevant information makes it impossible to do more than speculate about this at the moment. Nevertheless, there is a fairly strong possibility that international integration in recent decades has been accompanied by a certain amount of economic disintegration within countries, as transnationals have altered the spatial distribution of their activities within and between countries.
Compare, for instance, indicators of the extent of intra-industry trade in different industries estimated by Grubel and Lloyd (1975) and Aquino (1978) with the data on intra-firm trade in Helleiner (1981) and Casson and Associates (1986).
Batchelor, Major and Morgan (1980, pp. 90–91).
Quoted in United Nations (1985, p. 117).
Dunning and Pearce (1981, p. 132). See also Sen (1984, pp. 233–40) for a survey of the evidence on the importance of intra-firm trade in a number of countries.
Cf. United Nations (1985, pp. 117–18).
Quoted in Sen (1984, p. 236).
Cf. Helleiner (1981, p. 28) from which this and the other figures in the paragraph were taken.
Ibid., p. 34.
See Panić and Joyce (1980) and Panić (1982) for an analysis of certain aspects of the UK’s experience in this respect.
Goldsmith (1969). Furthermore, with the exception of centrally planned economies, long-term financial developments in different countries follow broadly similar lines (Goldsmith, 1966). This finding is similar to the one made by Kuznets (1966), which showed the growing long-term similarity of different countries’ industrial structures.
Kenen (1976, p. 20).
Ibid.
Whitman (1969).
See, however, World Bank (1985, p. 60) for estimates of the importance of foreign credit in total credits of a number of developing countries. See also Goldsmith (1966).
OECD (1982a, p.8).
Cooper (1968), Mills (1976), Walter (1985).
Hawkins (1972).
Cf. Kuznets (1966).
Goldsmith (1969).
Bloomfield (1968), World Bank (1985).
See Grubel (1979), Dunning (1981a).
Goldsmith (1969).
Ibid, p. 399.
Larsen, Llewellyn and Potter (1983, pp. 49–50).
Ibid., Hickman and Schleicher (1978), Fair (1982).
Larsen, Llewellyn and Potter (1983, p. 68). This means, as the authors point out, that ‘the model’s properties could be inappropriate in simulation conditions approaching full capacity utilisation’ (ibid.).
See also Cline and Associates (1981).
Cf. Goldstein and Khan (1982).
Ibid.
The OECD model of financial ‘linkages’ and exchange rates is described in some detail in Holtham (1984).
Larsen, Llewellyn and Potter (1983, p. 66).
This point is emphasised in Hickman and Schleicher (1978).
Author information
Authors and Affiliations
Copyright information
© 1988 Dr Milivoje Panić
About this chapter
Cite this chapter
Panić, M. (1988). International Economic Integration and Interdependence in the 1980s. In: National Management of the International Economy. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-07129-6_2
Download citation
DOI: https://doi.org/10.1007/978-1-349-07129-6_2
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-07131-9
Online ISBN: 978-1-349-07129-6
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)