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Students Zone - Answers to Case Study Questions
CASE STUDY 1.3: EUROPE’S INTERNATIONAL TRADING FUTURE?
1. Do you agree with the report that Europe still needs manufacturing industry?
Answer
Does Europe need industry? Article lists:
- Share of GDP maintained recently
- Fall in value added and jobs due to price changes and productivity gains and greater competition
- Services need manufacturing
- Wages are higher
- Technology, innovation, productivity gains, strategic role etc – comes from manufacturing
2. Outline what the report states as the reasons for poor growth in manufacturing. Can you think of any other reasons?
Answer
Reasons for decline – comparative advantage has shifted – to China, India, Brazil etc. Future of manufacturing in EU is due to threat of low wage competition; plus low transportation costs, better communications, opening up of trade, more flexible technology which means MNCs can take better advantage of the lower wages. But two issues identified:
- Technology – Europe still lags behind Japan and US
- The institutions are holding back low wage competitors which keeps costs low and keeps them competitive. Should incomes grow the chance for more intra industry trade with Europe (in higher quality goods), would increase and boost EU industry. The EU needs to push for this to help its industry.
Other chapter answers >>
- Case Study 1.2 Karstadt Undertakes Investment for Survival
- Case Study 2.1 Porter's Diamond
- Case Study 2.2 The Coffee Market
- Case Study 3.1 Sugar Industry
- Case Study 3.2 FSC Dispute
- Case Study 3.3 Beef Hormones
- Case Study 4.1 SEM Effects of Business
- Case Study 4.2 Africa's Economic Integration
- Case study 5.1 The Effect of Exchange Rates on Businesses – The Us Dollar
- Case Study 5 2 Real Exchange Rates in the Euro-Zone
- Case Study 6.1 SEC to Rethink Post-Enron Rules
- Case Study 6.2 A Controversial New European Directive
- Case Study 8.1 Cross-Border Banking Bids in Italy
- Case Study 8.2 The Future of the London Stock Exchange (LSE)
- Case Study 9.1 Back to Bread and Butter for Europe
- Case Study 9.2 Poductivity in European and International Labour Markets
- Case Study 11.1 Poorer EU Areas Lose Funding
- Case Study 11.2 A Diverse Approach to Curbing Greenhouse Gases
- Case Study 12.1 European and US Entrepreneurship Activity
- Case Study 12.2 EU Enlargement and the SME Sect
