Europe's Economic Landscape
International economic developments in western Europe have resulted in confusing images of the effects of globalization. We have witnessed shifts in the location of industry and developments in foreign direct investment that, at first sight, appeared to operate contrary to the expectations or the logic of the international division of labor as indicated by neoclassical theory. We have seen west European companies relocating in eastern Europe; Russian, Malaysian, and Korean companies manifesting their interest in a takeover of the now defunct Dutch aircraft-producer Fokker; Japanese and Korean companies investing in Great Britain; and even a Taiwanese company establishing in the Netherlands to produce bicycles!
The dynamics of these processes are impressive, fuelled as they are by the rapid changes in the strategies of large firms. It has not always been easy to make sense of these developments in terms of the locational choices or changes in the structure and functioning of the firms involved. The avalanche of new concepts that have been introduced in the literature in an effort at interpretation may, in itself, be an indication of a certain lack of direction. 1
In the absence of a clear insight into the nature of these processes, their direction and long-term effects, negative perceptions prevail. A similar situation occurred in the United States and Mexico when the ratification of the NAFTA treaty was being discussed. In both cases these processes of economic restructuring were interpreted as resulting from uncontrolled globahzing tendencies, leading -- as Philippe Naert formulated -- to "a merciless, nobody respecting, cut-throating hyper competition" that will threaten economic growth in many a region. 2 The efforts to attract firms through an improvement of the investment climate will -- in