Explore BrainMass

Role of Regional Integration in Global Business

I need help with the following. I would like to use Europe as my region.

What is the role of regional integration in promoting global business?

- Creation of trade
- Gains in economies of scale
- Bargaining power increase
- Market attractiveness increase
- Public goods cooperation

© BrainMass Inc. brainmass.com July 23, 2018, 1:54 pm ad1c9bdddf

Solution Preview

Regional Integration: Promoting Global Business in Europe

Regional integration in Europe

Regional integration represents some kind of preferential economic arrangement among the member countries where they co-operate with one another in many ways and eliminate restrictions on the intra-region flow of goods, services, capital and labor. Trade and investment is regulated also at the regional level through the creation of regional economic co-operation/integration schemes. In Europe, the regional integration helps in promoting global business (Sharan, 2005).

Trade creation

In the earliest phase of regional integration in Europe, there were signs of trade diversion. An intra-regional trade was increased for a short time period with weak comparative advantages. The external trade barriers were reduced and the access of the market was improved for outsiders. These two incidents helped regional integration in promoting global business by global trade creation. The import demand and economic growth in Europe was promoted by regional integration, which also attracted trade from outside of the country. The regional producers get comparative advantages (Sharan, 2005).

The barriers of ...

Solution Summary

The response addresses the queries posted in 651 words with references and discusses regional integration in Europe.