Nicolas Forsans

Increasing the Size of the ‘Country’: Regional Economic Integration and Foreign Direct Investment in a Globalized World Economy

Two contradictory trends characterized the world economy during the approach to the twenty-first century. First, the globalization of the economy, together with the successful conclusion of the Uruguay Round and the establishment of the World Trade Organization (WTO), brought about a steady decline in barriers to international business transactions. Second, however, as countries have lost their conventional powers to protect themselves from the outside world, they have grouped together, often on a pan-continental basis, into regional trading blocs. Regional economic integration, in the form of institutions such as the North American Free Trade Agreement (NAFTA), the European Union (EU) or the Asia-Pacific Economic Co-operation (APEC), represents the main way that remains accessible to countries in their attempt to maintain and promote their levels and shares of world investment, employment, income and growth.

A Simple and Flexible Dynamic Approach to Foreign Direct Investment Growth: The Canada-United States Relationship in the Context of Free Trade

In the post-war period the world economy has seen the rise and expansion of regional trading blocs and regional economic integration.1 The prime example has been the evolution of the European Union since the early 1950s; also significant has been the creation of the Asia-Pacific Economic Cooperation Area in 1989, and development of the North American free trade area, dating also from 1989. This paper will focus on the Canada-United States relationship. While the intentions of the partners to a free trade agreement are clear in the case of trade, the effect on foreign direct investment (FDI) is ambiguous. The question this paper addresses is that of how the North American free trade agreements have affected US foreign investment behaviour in Canada.

Country Linkages and Firm Internationalization: Indian MNEs within Economic-Political Alliances of Nations

The theory of alliances between nations has been primarily studied in the field of politics from the point of view of defence and foreign policy whereas the economic theory of alliances is widely studied in the context of public goods (Olsen and Zeckhauser, 1966). However, the role of inter-country alliances in promoting economic development, trade or investment has attracted less interest. This chapter builds on the economic theory of alliances to argue that economic-political alliances between nations, such as the Commonwealth grouping, contribute to promoting foreign direct investment (FDI).

Acquisitions versus licensing agreements as vehicles for technology transfer

Traditionally, emerging economies have sought to acquire technology and know-how from inward FDI and/or technology licensing agreements. In the recent past, countries such as India and Brazil followed the lead of Japan and resorted to technology licensing agreements in a major way for their requirements of technology and know-how. In recent years, several emerging economies, with India and China being the most prominent, have acquired foreign firms with acquisition of technology and know-how as one of the principal motives for such overseas investments. This paper argues that such overseas acquisitions are a much more efficient and inexpensive source of technology and know-how for countries such as India than licensing agreements.

Foreign Market Servicing Strategies in the NAFTA Area

This chapter examines the link between globalization and the growth of trade blocs using the experience of the North American Free Trade Agreement (NAFTA). Globalization is interpreted as the differential pace of integration of national markets of different types. In comparison with other forms of international business (for example, trade in intermediate and finished products, technology licensing and so on.) foreign direct investment (FDI) is seen as the agent of ‘deep integration’ (UNCTAD, 1993).