Regional Economic Integration Flashcards Preview

International Business > Regional Economic Integration > Flashcards

Flashcards in Regional Economic Integration Deck (9)
Loading flashcards...

Why do nations pursue economic integration?

Expand market size

Enhance productivity and economies of scale

Attract investment from outside the bloc

Acquire stronger defensive and political posture


Country level drawbacks of regional integration

Trade creation- as barriers fall, trade is generated inside the bloc

Trade diversion- member countries discontinue some trade with nonmember countries

Aggregate effect- reduce global free trade

Loss of national identity

Sacrifice of autonomy


Firm-level drawbacks of regional integration

Transfer of power to advantages firms

Failure of small or weak firms

Corporate restructuring and job loss


What factors help regional integration succeed?

Economic similarity

Political similarity

Similarity of culture and language

Geographic proximity


Implications of regional economic integration for the firm?

Internationalisation by firms inside the economic bloc

Rationalisation of operations

Mergers and acquisitions

Regional products and marketing strategy

Internationalisation by firms from outside the bloc


What is regional economic integration?

The growing economic interdependence that results when nations within a geographic region form an alliance aimed at reducing barriers to trade and investment


What do cooperating nations obtain?

Increased product choices, productivity, living standards

Lower prices

More efficient resource use


What is an economic bloc?

A geographic area consisting of two or more counties that agree to pursue economic integration

By reducing tariffs and other barriers to the cross-border flow of products, services, capital, and in more advanced cases, labour


Economic bloc examples