Erim - 04 omslag Mullerxp5 01-04-2004 11:55 Pagina 1 The Rise of Regionalism 38 ALAN R. MULLER Regionalism has eclipsed the multilateral system as the ‘fast track’ for international economic restructuring. Within that framework, ALAN R. MULLER the Single European Market (SEM) and North American Free Trade Agreement (NAFTA) have emerged as the bi-polar core of the global economic system. Both agreements were sold to the public on relatively abstract terms, employing complex economic models as the The Rise basis for projected growth and increased competitive advantage. National governments at the time tended to take a relatively simplistic view of ‘the firm’ and ignore the strategic diversity among of Regionalism economic actors. Partly as a result, ten years into the ‘Second Wave’ The Rise of Rgionalism of regionalism there are few uncontested conclusions as to its outcomes or significance. Core Company Strategies under Regional integration in Europe and North America was largely facili- the Second Wave of Integration tated through the lobby activity of Western ‘core companies’: large, powerful firms that lead economic restructuring and operate with one foot in the political process. For Western core companies, regionalism has become the institutional framework of choice within which the struggle for the preservation and consolidation of their core positions is played out. Taking their spatial organization of production in 1990 as a baseline, this study is the first to systema- tically unravel the traditional macro-aggregated understanding of integration outcomes. The evidence shows that, despite the persis- tence of ‘globalization’ ideology, regionalism has fueled a diverse pattern of strategic migrations among core companies, particularly since 1995. The outcome is one of growing polarization between North American and European core companies, and consequently within an increasingly dyadic world economy. ERIM The Erasmus Research Institute of Management (ERIM) is the Research School (Onderzoekschool) in the field of management of the Erasmus University Rotterdam. The founding participants of ERIM are the Rotterdam School of Management and the Rotterdam School of Economics. ERIM was founded in 1999 and is officially accredited by the Royal Netherlands Academy of Arts and Sciences (KNAW). The research undertaken by ERIM is focussed on the management of the firm in its environment, its intra- and inter-firm relations, and its business processes in their interdependent connections. The objective of ERIM is to carry out first rate research in management, and to offer an advanced graduate program in Research in Management. Within ERIM, over two hundred senior researchers and Ph.D. candi- dates are active in the different research programs. From a variety of academic backgrounds and expertises, the ERIM community is united in striving for excellence and working at the forefront of creating new business knowledge. www.erim.eur.nl ISBN 90-5892-062-3 THE RISE OF REGIONALISM: CORE COMPANY STRATEGIES UNDER THE SECOND WAVE OF INTEGRATION De opkomst van regionalisering: kernondernemingsstrategieën onder de tweede integratiegolf Proefschrift ter verkrijging van de graad van doctor aan de Erasmus Universiteit Rotterdam op gezag van de Rector Magnificus Prof.dr. S.W.J. Lamberts en volgens besluit van het College voor Promoties. De openbare verdediging zal plaatsvinden op donderdag 3 juni 2004 om 13:30 uur door Alan René Muller geboren te Niagara Falls, New York (USA) Promotiecommissie Promotor: Prof.dr. R.J.M. van Tulder Overige leden: Prof.dr. S.J. Magala Prof.dr. P.M.H.H. Matthyssens Prof.dr. G.C.A. Junne Erasmus Research Institute of Management (ERIM) Rotterdam School of Management / Rotterdam School of Economics Erasmus University Rotterdam Internet: http://www.erim.eur.nl ERIM Electronic Series Portal: http://hdl.handle.net/1765/1 ERIM Ph.D. Series Research in Management 38 ISBN 90–5892–062–3 © 2004, Alan Muller All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means electronic or mechanical, including photocopying, recording, or by any information storage and retrieval system, without permission in writing from the author. For Carter & Finn ACKNOWLEDGEMENTS The presumptuously thick book before you is the product of the long and winding road known as ‘the PhD’. Fortunately I have learned that, despite the tendency to panic on occasion, if you stick to it and try to keep your wits about you, that road will lead to again and again to the same point of clarity while winding less and less each time around. In this book I have tried to stay true to my background in International Political Economy while bridging the gap to the field of Business and Strategy; in doing so I have had the advantage of moral, technical, practical and intellectual support from a large number of individuals, some of whom I, despite my best intentions, will undoubtedly fail to mention here. First of all, thanks to my current colleages at the department of Business Society Management, who have contributed to giving me a laid-back work environment amidst the grey-suit hustle and bustle of a Business School, and who appear to see my American background not so much as a flaw, but rather as an asset! I am particularly grateful to my partners in crime Douglas van den Berghe and Arjen Mulder. Douglas ‘broke the ice’ for me my first two years in many ways, and provided a sounding board for ideas and insecurities while we shared a room and carpooled together. Arjen has been a source of inspiration and comic relief over the past few years and, thanks to the fact that our last names differ by only one letter and our rooms by only one number, we are fortunate enough to be regularly mistaken for one another. In this way we keep each other in check. Jeroen van Wijk deserves special mention for discretely and unassumingly offering guidance and showing an unabated interest in my progress, my person and my future. Thanks also to the countless student assistants who throughout the years have made the SCOPE database possible, painstakingly entering data the old-fashioned way, putting up with the agonizingly slow learning curve of their daily supervisors (myself among them) and never getting sufficient credit for work done. This applies particularly to David Frans, whose contribution to SCOPE cannot be expressed in hours or in currency. It also applies to former student assistant and current Amsterdam PhD student in Fabienne Fortanier, who unwittingly and unintentionally continues to ‘raise the bar’ and force me to work and think harder. Both within the world of SCOPE and without, I owe a great debt of gratitude to my PhD adviser Rob van Tulder, for his seemingly limitless ability to inspire, to come up with clever solutions, to juggle too many balls, and to give me just enough room – but not too much – to do my own thing. Our collaboration over the past few years has been extremely fluid, largely due to an unusual level of synergy and accord between our intellectual perspectives. My thanks also to my former thesis adviser at the University of Amsterdam, Gerd Junne, who in 1998 brought me into contact with his own erstwhile PhD student, just recently endowed with a professorship in Rotterdam. Additional mention goes to other academics who have been supportive of my research, such as Danny van den Bulcke and Rob Grosse. A word of appreciation also goes to the ‘boys’ at Fource Consulting, who back in the day tried hard, but not too hard, to dissuade me from pursuing my dreams and introduced me to key concepts such as ‘the mass marketing test tool’ and ‘the chasm’. The transition from ‘the young and the eager’ at Fource to a decidedly different atmosphere at Erasmus was infinitely greater than I anticipated. i Last but not least, my thanks to my parents, my sister and my friends for supporting me, encouraging me and expecting nothing less than the best I have to give. That support has also carried over across the Atlantic: established friendships on the ‘American side’ with people like Jesse Kerns and Casey Nault, which I know will last a lifetime, have been complemented by true friends on this side of the pond like Diederik van Hese and my two ‘paranymphs’, Mike van Akkooi and Moor de Leeuw. During my period as a PhD student, however, the focus has shifted somewhat to center on my own little nuclear family through the birth of my two sons, Carter and Finn. They have made the challenge of completing my dissertation ‘more or less on time’ all the greater but all the more worth it. Of course I would not even have made it to writing these acknowledgements had it not been for Sofie, my rock in the stream, who had the wherewithal to egg me on, the love to believe in me and the patience to put up with my insecurities. Without her I would be a much lesser man. Alan Muller Haarlem, March 2004 ii TABLE OF CONTENTS ACKNOWLEDGEMENTS ................................................................................................. i ACRONYMS AND ABBREVIATIONS............................................................................ v EXECUTIVE SUMMARY ............................................................................................... vii 1. INTRODUCTION.......................................................................................................... 1 1.1 SUMMARY OF THE PROBLEM ......................................................................................1 1.2 RESEARCH QUESTIONS...............................................................................................3