Business Interests and Regional Integration in Southeast Asia: A Comparison with Europe

Abstract

Regional economic integration has often been pursued as a response to a prolonged economic crisis or competitive pressure from rival states or regions. When confronted with a serious economic slowdown in major states in the region or the relatively declining position of their industries against those in rival states or regions, the governments of these states raise incentives to promote regional arrangements for market integration. This is because such arrangements will create a larger market that enables firms to strengthen their competitive edge by improving the economies of scale and reducing production costs.