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Flashcards in Regional Economic Integration Deck (9)
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1
Q

Why do nations pursue economic integration?

A

Expand market size

Enhance productivity and economies of scale

Attract investment from outside the bloc

Acquire stronger defensive and political posture

2
Q

Country level drawbacks of regional integration

A

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

3
Q

Firm-level drawbacks of regional integration

A

Transfer of power to advantages firms

Failure of small or weak firms

Corporate restructuring and job loss

4
Q

What factors help regional integration succeed?

A

Economic similarity

Political similarity

Similarity of culture and language

Geographic proximity

5
Q

Implications of regional economic integration for the firm?

A

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

6
Q

What is regional economic integration?

A

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

7
Q

What do cooperating nations obtain?

A

Increased product choices, productivity, living standards

Lower prices

More efficient resource use

8
Q

What is an economic bloc?

A

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

9
Q

Economic bloc examples

A

ASEAN

APEC