Industrial Location and Globalization of Enterprise Review Questions Term paper topics and prospectus The State is Dead…Long Live the State due one month from.
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Transcript Industrial Location and Globalization of Enterprise Review Questions Term paper topics and prospectus The State is Dead…Long Live the State due one month from.
Industrial Location and
Globalization of Enterprise
Review
Questions
Term paper topics and prospectus
The State is Dead…Long Live the State
due one month from today!
Definitions
Emergence of the State – a new idea
States as containers
States as regulators
Defining some terms I
State: portion of geographical space
within which, the resident population is
organized by an authority structure
Externally recognized sovereignty over their
territory
Ambiguity! ‘State’ is commonly used to
refer to subnational regions e.g.
Montana, Durango, New South Wales
Defining some terms II
Nation: large group of people with a common
culture, sharing traits such as language, values,
institutions, historical experience and shared sense
of identity.
A nation does not necessarily have a territory.
E.g. Kurds, Roma, Palestinians, Blackfoot Confederacy
Ambiguity! ‘Nation’ is often used to refer to a
sovereign state that contains many national groups
Defining some terms III
Nation-state: a nation with a state wrapped
around it.
A nation with its own state.
A state in which there is no significant group that
is not part of the nation.
E.g. Japan, Denmark
Ambiguity! ‘Nation-state’ may be used to
refer to a sovereign state to distinguish it from
a sub-national state
Defining some terms IV
Multinational state:
There is no accepted definition!
Any state that contains more than one nation
E.g.?
When there were no states…
Class identity
Religious identity
Reciprocal obligations
Loyalty to superiors in rank
“L’État, c’est moi!” Louis XIV
Industrial Location and
Globalization of Enterprise
Review
Questions
Term paper: How to have an idea!
The State is Dead…Long Live the State
Emergence of the State – a new idea
States as containers
States as regulators
Westphalia Model
Peace of Westphalia, 1648
End of Thirty Year’s War
Recognition of sovereign states
with clear geographical boundaries
recognized governments
and exclusive jurisdiction
Territoriality and autonomy
States emerge in the enlightenment
Mercantilism: protectionism, imperialism,
evangelism
How to Conceive of the State?
As containers of distinctive business practices
As a regulator of economic activities within its
boundaries and beyond
national - cultural contrasts
Extraterritoriality issue e.g. treaty ports
As competitors by developing the skills and
technology that underpin competitive
advantage
Michael Porter
States as ‘Containers’
‘Around 190 states’ according to text
191 members of the UN,
Vatican City is not a member (Population 771)
Most recent members are Switzerland and East
Timor
Thorny problems:
Greenland (Self-governing Overseas Administrative
Division of Denmark: Kalaallit Nunaat
Puerto Rico (Territory of the US)
Taiwan (founding UN member, expelled in 1971)
Pitcairn Island with population of 50, overseas
territory of UK
States as ‘Containers’
Containers of distinctive cultures, practices,
and institutions.
Supposed behavioural traits:
Individualism vs. collectivism
Power
Risk aversion
Masculinity
Varieties of capitalism
Stereotyping
Industrial Location and
Globalization of Enterprise
Review
Questions
The State is Dead…Long Live the State
States as regulators
States as regulators
Trade Policy
FDI Policy
Exports and imports
Inward and outward
Industry Policy
Trade: Import Policies
Tariffs
Ad valorem duties (percent of FMV)
Specific duties (fixed amount per unit)
Could be CIF, FOB, or FAS
Weight, number, length, volume e.g. 10¢ per kg
Compound tariff: ad valorem and specified duties - combo
Tariff schedules
Harmonized Commodity Coding and Classification System
Non-tariff barriers (NTBs)
Quotas
Imposition of VERs
Import licenses
Rules of origin
Anti-dumping measures
Labelling & packaging
Customs procedures & documentation
Trade: Import Policies II
Non-tariff barriers (NTBs)
Subsidies to domestic producers of importcompeting goods
Countervailing duties on subsidized imports
Local content requirements
Preferential procurement policies
Exchange rate manipulation
Trade: Export Policies
Financial incentives to export producers
Export credits
Export promotion agencies
Free trade zones
Export processing zones
VER
Export embargo on strategic products
Exchange rate manipulation
FDI Policy: Inward
Screening of investment proposals
Exclusion of foreign firms from strategic
sectors
Banking
Culture industries
Local employment provisions
Local content
Minimum level of exports
Technology transfer
FDI Policy: Inward II
Locational restrictions on FDI
Restricted repatriation of profits
Differential corporate tax rates
Encouragement of inward FDI
Turnkey services
Investment incentives
FDI Policy: Outward
Restrictions on export of capital
Government approval requirements for
FDI
Industrial Policies: Investment Incentives
Investment incentives
Accelerated depreciation allowance
Procurement policies
Technology policies
Small firm policies
Industrial Policies: Investment Incentives
Merger and competition policies
Taxation policies
Labour market regulation
Employment standards
Minimum wage legislation
Labour relations legislation
‘Right to work’
Environmental regulations
Health and Safety
Targeted Industrial Policy
Particular sectors
Particular types of firms
Sunset industries
Sunrise industries
Strategic sectors
New and small firms
Attract foreign firms
Particular regions
Depressed regions
Buoyant regions
Industrial Location and
Globalization of Enterprise
Review
Questions
Midterm – Thursday
Prospectus - Tuesday
Dumping
The State is Dead…Long Live the State
Supranationalism-Regional Economic Blocs
Examples from Japan, China and Mexico
Midterm
A. 10 multiple choice questions, 5 choices no penalty for incorrect
responses 10@2=20
B. 5 short answer questions from a choice of 8. 5@10=50
One concise paragraph."
C. Essay 1 essay from a choice of three. 1@30=30
three paragraphs
You are responsible for:
1. Field trip
2. All lecture material up to and including March 1 but excluding
Mahindra tractor.
3. Textbook Chapters 1-5 and Chapter 6 pp. 164-170 and China
pp. 188-191
AND pp. 171-175, 191-193
Dumping
Sale in a foreign country at a price less
than charged in the country of origin
May be encouraged by hidden subsidies
or surplus production
WTO specifies antidumping duties if the
dumping injures or threatens to injure
producers in the importing country
Regional Economic Integration
Free
trade
area
Removal of trade
barriers between
members
Common external
trade barriers
Free movement of
factors of
production
Harmonization of
all economic
policies
Customs Common Economic
union
market
union
Impacts of Economic Integration
Trade diversion:
trade with an outsider is replaced by trade
with an insider
Trade creation:
trade created in lieu of import substitution
Foreign investment may also be diverted
or created
Tariff factories may close, rationalization
Free Trade Area
Association of South-East Asian Nations
1967: ASEAN Declaration, Bangkok
APEC (Tangent)
Asia-Pacific Economic Cooperation
Forum
“A Perfect Excuse to Chat”
Customs Union
Zollverein - Customs Union of all the
German states, led by Prussia in 1833
Andean Community – Ancom
Bolivia, Colombia, Ecuador, Peru,
Venezuela
1969, revived in 1990
Common Market by 2005
Common Market
Mercado Comun del Sur (Mercosur/Mercosul)
1991: Treaty of Ascunción
Argentina, Brazil, Paraguay, Uruguay
eliminated tariffs on 90% of the goods traded within the bloc,
Established an average common external tariff of 14% on 85% of the
goods imported from nonmembers.
Customs Union
Common Market by 2006
express passport lanes for MERCOSUR citizens
regional passports
liberalize migration
market of 190 million people
Montevideo has become the capital
Itaipu Dam
Mercosur
Economic Union
EU from EEC: Treaty of Rome, 1957
Removal of Barriers
Physical barriers
Technical barriers
Customs
Factors of production
Product standards
Business law and capital flow
Fiscal barriers e.g. VAT
Public procurement
But natural barriers remain!
Japan
Western approach: “market imperfections” corrected by the state
Japan Inc.
Historical roots:
Small resource base
Post World War II: Manufacturing.
Meiji restoration 1868: Emperor restored to political power
Imperialism
State and capital are united in goal to build up a powerful industrial base
Ownership is private
State guides enterprise in a highly competitive domestic economy &
Trade, international focus
Post bubble economy
Restructuring
Financial sector
Japan =- MITI
MITI - Ministry of Industry and Trade
1. Planning to achieve long term goals (visioning)
based on strengths
2. Allocates capital to strategic industries (targeting)
via commercial banks
3. Protection against imports
4. Imports technology for domestic use.
The guiding hand.
Licensing, not FDI is measure for technology transfer
5. Intense internal competition keeps costs down.
6. Targets industries for capacity reduction,
rationalization and closure
Geography of the Open Policy
Special Economic Zones – 1979
Shenzhen – Hong Kong
Zhuhai – Macau
Shantou – S-E Asian connections
Xiamen – Taiwan links
Incentives include:
Tax concessions
Freeport – duty-free imports
Infrastructure
A New Megalopolis-Pearl River
Shanghai
China
Dual Economy
Foreign-owned enterprise
State-owned enterprise
WTO membership in 2001
Massive migration
Rural to urban
Agriculture to manufacturing
West to east
Interior to coast