Markets Globalisation by Firms from Emerging Markets and Small Countries

Abstract

This article focuses on the role of governments and companies from emerging markets and small countries in the process of market integration. The process of market integration has begun after World War II. At the beginning of the period market integration was the outcome of the way that large companies in the developed countries increase their value via international business activities. Not surprisingly most of the research was based on models of industrial organisation. The world has changed and market integration has become a two-way street where firms and governments from emerging markets and small countries are as active as the developed countries MNEs and their governments. In this article the basic international trade model is used to gain insights of the new world of international business and market integration. In particular, a dynamic model of changing factor intensity and of creating local specific competitive and comparative advantages for firms and governments from emerging markets is presented and discussed.