10 - Chapter 9 - Cross-National Cooperation &...

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<OBJECT id=ieooui classid="clsid:38481807-CA0E-42D2-BF39-B33AF135CC4D"> Governments do this to make the firms which create valuable goods and services (locate their VACs) within the region's borders more competitive by giving them access to more sources of comparative advantage for upstream rationalization of their VACs and expanded distribution, more consumers downstream over which they can spread the fixed capital costs of upstream production. This means that the competition between the MNEs (firms) doing business inside their borders will intensify and the winners will provide better products and services to consumers within their borders as well as becoming more viable external global competitors in other regions. In the fuller forms or regional economic integration such as the European Union, you can think of the process as one of "globalization on a regional basis." Domestic firms and foreign firms with requisite levels of FDI can achieve economies of
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10 - Chapter 9 - Cross-National Cooperation &amp;...

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