The Integration of Spain in the European Union: Main Industrial Effects

Abstract

The paper evaluates the different effects of European integration on Spanish industry. Up to the present time foreign industrial trade has increased noticeably, rapidly reaching the level of the other European countries. This has been highly beneficial to the Spanish economy, involving intense trade creation and the absence of significant trade deviation. To confront the external challenge, firms have clearly changed their technical and corporate organization, through a process of technical transformation, mergers and internationalization that have improved the quality of products and raised productivity. Inflows of foreign direct investment have substantially helped this transformation. As a consequence of these developments, Spanish industry has higher levels of growth and more rapid increases in exports than any other country in the European Union. Industrial policy has become very similar to that of the other European countries, following a process begun prior to 1986, the date Spain joined the European Union. Key Words: Integration Economics, European Union, International Economics, Manufacturing sector