Company–specific Factors and International Competitiveness

Abstract

This article arises from concern about the inadequacy of the theoretical and empirical evidence on the costs and benefits to business of the EU single currency. It uses a survey of companies in the UK (which has not had a stable currency regime) and Ireland (committed to the ERM) together with the “process” dimension of the Buckley et al (1988) 3‐P model of the international competitiveness of the firm to highlight implications for exporters of long‐term government commitment to exchange‐rate stability. The results indicate a positive link between currency stability and three measures of “process” competitiveness: commitment to international business, economies of scale and economies of scope.