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Domestic Markets and International Competitiveness

Author

Listed:
  • Ashish Arora

    (Carnegie Mellon University)

  • Alfonso Gambardella

    (University of Urbino)

Abstract

DOMESTIC MARKETS AND INTERNATIONAL COMPETITIVENESS This paper develops a theoretical and empirical model to analyze the effects of the size and nature of domestic markets on the international competitiveness of national industries. We validate our theory using data on the more than 20,000 plants in the sector producing engineering services for petrochemical plants. Our analysis suggests that the (relative to the US) competitiveness of European or Japanese industries is greater in activities whose underlying competencies can be utilized repeatedly across products instead of being confined to well defined product category. Put differently, the cost penalty due to the fragmented European markets is the least in the case of activities based on generic competencies, and the greatest for activities based on product specific competencies. Keywords: International competition, market size, competencies, engineering industry

Suggested Citation

  • Ashish Arora & Alfonso Gambardella, 1996. "Domestic Markets and International Competitiveness," Industrial Organization 9605001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:9605001
    Note: Type of Document - PS; prepared on IBM PC ; to print on PostScript; pages: 44; figures: included/request from author/draw your own
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    References listed on IDEAS

    as
    1. Rebecca Henderson & Iain Cockburn, 1996. "Scale, Scope, and Spillovers: The Determinants of Research Productivity in Drug Discovery," RAND Journal of Economics, The RAND Corporation, vol. 27(1), pages 32-59, Spring.
    2. Gambardella, Alfonso & Torrisi, Salvatore, 1998. "Does technological convergence imply convergence in markets? Evidence from the electronics industry," Research Policy, Elsevier, vol. 27(5), pages 445-463, September.
    3. N/A, 1968. "Chemical Process Plant : Innovation and the World Market," National Institute Economic Review, National Institute of Economic and Social Research, vol. 45(1), pages 29-51, August.
    4. David J. Teece & Richard Rumelt & Giovanni Dosi & Sidney Winter, 2000. "Understanding Corporate Coherence: Theory and Evidence," Chapters, in: Innovation, Organization and Economic Dynamics, chapter 9, pages 264-293, Edward Elgar Publishing.
    5. Richard R. Nelson, 1995. "Recent Evolutionary Theorizing about Economic Change," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 48-90, March.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Catherine Matraves & Laura Rondi, 2007. "Product Differentiation, Industry Concentration and Market Share Turbulence," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(1), pages 37-57.
    2. Suma Athreye, 1997. "On Markets in Knowledge," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 1(2), pages 231-253, June.

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    More about this item

    Keywords

    international competitiveness; market size; product specific assets; engineering services; chemical industry;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • L8 - Industrial Organization - - Industry Studies: Services
    • F0 - International Economics - - General

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