Winter Term 1996
Jochen Lorentzen
Department of International Relations and European Studies
Central European University

Course Description

The course aims at an analysis of issues confronting states and firms in the global economy. More specifically, it deals with the effects government policies have on international business and, conversely, how corporate strategies constrain state options in the areas of trade and industrial policy. To this end, the course will first clarify what academics, policymakers and businesspeople mean when talking about international competitiveness. The current debate on this topic is then placed in a historical context and applied to select policy areas. Finally, the interactions of governments and firms are analyzed. The course content has a bias toward the Triad economies, that is North America, Europe and Japan. Of course, the above issues are also relevant to governments and firms in developing and emerging-market countries; discussions in class related to the latter are most welcome.

The course is assessed on the basis of a mid-term paper and a final two-hour in-class exam.

Course Outline
[RR = required reading; SR = supplementary reading]

Part I: International Competitiveness

Session 1. Introduction and Overview
RR: Dunning (1990); Schwab and Smadja (1994)
SR: O'Brien (1992)

Session 2. Trade and Investment in the World Economy
RR: Julius (1990)

Session 3. International Competitiveness -- Concepts and Theories
RR: The Fight over Competitiveness (1994); Krugman (1994);
SR: Prestowitz (1989); Thurow (1992); Wood (1994)

Part II: Economic Performance and Import Competition --
The Debate in the US and Europe

Session 4. Technology and Strategic Trade
RR: Cohen and Zysman (1989); Ramstetter and James (1993)
SR: Baldwin (1988); Dore (1986); Garten (1993, chaps 4,5); Hart ( 1992); Hughes (1990); Krugman (1987); Tyson (1992); Westney (1993)

Session 5. Competitiveness and National Security
RR: Borrus and Zysman (1992); Kuttner (1991, chap.6)
SR: Borrus, Sandholtz, Weber and Zysman (1992)

Session 6. The EC Commission's White Paper on Competitiveness
RR: Commission of the European Communities (1993); Jackson (1993, chap.7); Strange (1995)
SR: Commission of the European Communities (1994); Young and Hamill (1992)

Part III: International Business and State Strategies

Session 7. Corporate Competitiveness
RR: Porter (1990, chaps 1-4)

Session 8. Home Governments and Domestic Firms: Industrial and Trade Policy
RR: Tyson and Yoffie (1993)
SR: Milner (1988)

Session 9. Host Governments and Foreign Firms: History and Theory
RR: Behrman and Grosse (1990, chap.1); Dunning (1991);
SR: Rugman and Verbeke (1990, chaps 2,6); Safarian (1991)

Session 10. Host Governments and Foreign Firms: Contemporary Issues
RR: Cowhey and Aronson (1993, chaps 1-4)
SR: Dunning (1988)

Session 11. Global Competition Rules
RR: Cowhey and Aronson (1993, chaps 8-10)

Baldwin, Richard E. 1988. Trade Policy in a Changing World Economy. New York: Harvester Wheatsheaf.
Behrman, Jack N. and Robert E. Grosse. 1990. International Business and Governments: Issues and Institutions. Columbia: University of South Carolina Press.
Borrus, Michael, Wayne Sandholtz, Steve Weber and John Zysman. 1992. "Epilogue." Chap. in Sandholtz, The Highest Stakes. New York: Oxford University Press.
_______ and John Zysman. 1992. "Industrial Competitiveness and American National Security." Chap. in Sandholtz, The Highest Stakes. New York: Oxford University Press.
Cohen, Stephen and John Zysman. 1989. "Diverging Trajectories." In Politics and Productivity, eds Chalmers Johnson, Laura D'Andrea Tyson and John Zysman, 39-53. New York: Harper Business.
Commission of the European Communities. 1993. "Growth, Competitiveness and Employment: The Challenges and Ways Forward into the 21st Century." Bulletin of the European Communities, Supplement 6.
_______. 1994. "An Industrial Competitiveness Policy for the European Union." Bulletin of the European Union, Supplement 3.
Cowhey, Peter F. and Jonathan D. Aronson. 1993. Managing the World Economy. New York: Council of Foreign Relations.
Dore, Ronald. 1986. Flexible Rigidities. Stanford: Stanford University Press.
Dunning, John H. 1988. "Cross-Border Corporate Integration and Regional Integration." Chap. in Explaining International Production. London: Unwin Hyman.
_______. 1990. "The Globalisation of Firms and the Competitiveness of Countries: Some Implications for the Theory of International Production." Chap. in Globalisation of Firms and the Competitiveness of Nations, John Dunning, Bruce Kogut and Magnus Blomstroem. Lund: Institute of Economic Research.
_______. 1991. "Governments and Multinational Enterprises: From Confrontation to Co-operation?" Millennium 20, no.2: 225-43.
"The Fight over Competitiveness." 1994. Foreign Affairs 73, no.2: 28-44.
Garten, Jeffrey. 1993. A Cold Peace. New York: Times Books.
Hart, Jeffrey A. 1992. Rival Capitalists. Ithaca: Cornell University Press.
Hughes, Kirsty S. 1990. "Competition, Innovation, and Industrial Performance." In Structural Change in the World Economy, eds Allan Webster and John H. Dunning, 49-66. London: Routledge.
Jackson, Tim. 1993. Turning Japanese. London: Harper Collins.
Julius, DeAnne. 1990. Global Companies and Public Policy. London: Royal Institute of International Affairs.
Krugman, Paul. 1987. "Strategic Sectors and International Competition." In U.S. Trade Policies in a Changing World Economy, ed. Robert Stern, 207-32. Cambridge, MA: MIT Press.
_______. 1994. "Competitiveness: A Dangerous Obsession." Foreign Affairs 73, no.2: 28-44.
Kuttner, Robert. 1991. The End of Laissez-Faire. New York: Alfred A. Knopf.
Milner, Helen. 1988. Resisting Protectionism. Princeton: Princeton University Press.
O'Brien, Richard. 1992. Global Financial Integration: The End of Geography. New York: Royal Institute of International Affairs.
Porter, Michael E. 1990. The Competitive Advantage of Nations. London: Macmillan.
Prestowitz, Jr., Clyde V. 1989. Trading Places. New York: Basic Books.
Ramstetter, Eric D. and William E. James. 1993. "Transnational Corporations, Japan-United States Economic Relations, and Economic Policy: The Uncomfortable Reality." Transnational Corporations 2, no.3: 65-96.
Rugman, Alan and Alain Verbeke. 1990. Global Corporate Strategy and Trade Policy. London: Routledge.
Safarian, A.E. 1991. "Firm and Government Strategies." In Multinationals and Europe 1992, eds B. Buergenheier and J.J. Mucchielli, 187-203. London: Routledge.
Schwab, Klaus and Claude Smadja. 1994. "Power and Policy: The New Economic World Order." Harvard Business Review November/December: 40-50.
Strange, Susan. 1995. "European Business in Japan: A Policy Crossroads." Journal of Common Market Studies 33, no.1: 1-25.
Thurow, Lester C. 1992. Head to Head: The Coming Economic Battle among Japan, Europe, and America. New York: Morrow.
Tyson, Laura D'Andrea. 1992. Who's Bashing Whom: Trade Conflict in High Technology Industries. Washington: Institute for International Economics.
_______ and David B. Yoffie. 1993. "Semiconductors: From Manipulated to Managed Trade." In Beyond Free Trade, ed. David B. Yoffie, 29-78. Boston, MA: Harvard Business School Press.
Westney, Eleanor. 1993. "Country Patterns in R&D;Organization: The United States and Japan." In Country Competitiveness, ed. Bruce Kogut, 36-53. New York: Oxford University Press.
Wood, Adrian. 1994. North-South Trade, Employment and Inequality: Changing Fortunes in a Skill-Driven World. Oxford: Clarendon.
Young, Stephen and James Hamill. 1992. Europe and the Multinationals. Aldershot: Edward Elgar.

CRC-Curriculum Resource Center
CEU Budapest, Hungary
Modified: April, 1996


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