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The Single European Market (SEM) represents the final stage in the process of economic integration of trade in goods and services and the free movement of individuals in the European Community (EC). The discussion of the benefits of the SEM has been concentrated primarily on the extent to which the elimination of non‐tariff barriers will lead to greater economic efficiency. The progress in the creation of a single labour market within the EC is reviewed and the relationship between labour mobility and migration in order to assess the impact of the free movement of labour. It is argued that internal migration will generally fall due to the free mobility of capital. Where labour embodies significant human capital however, migration is expected to rise in response to the removal of barriers.

Multinational enterprises (MNEs) play a dominant role in the international business (IB) literature. Traditionally, by far the majority of IB studies deal with issues at the micro level of the individual MNE, or at the meso level of a sample of individual MNEs in industries. This paper focuses on the impact of MNE behavior through foreign direct investment (FDI) on a country’s international trade, and vice versa. In so doing, this study responds to a recent plea for more macro‐level studies in IB into the effect of MNE behavior on the macroeconomic performance of countries as a whole, particularly developing and emerging economies. In the current study, we focus on the largest developing or emerging economy of all: China. Applying sophisticated econometric techniques, we unravel the causality and direction of FDI‐trade linkages for the Chinese economy in the 1980‐2003 period.

The purpose of this chapter is to provide an overview of the research presented in this edited volume.

This report is based on 17 chapters, which vary in terms of research approach, design, and method, yet aims to present different country perspectives on diversity within diversity management.

The chapters present new insights on how the national and macro-social environment impacts the institutional approaches to diversity management across the world. Findings indicate the need for organizations to focus on deep-level diversity, rather than choosing a tick-box policy on surface-level diversity. Empirical studies reveal that every institution can adopt a diversity-friendly approach in a way that best fits their structure, culture and the mentality of their top management team.

The report summarizes and integrates novel insights on country perspectives and approaches on diversity management.

In this paper, we study attitudinal responses of host country residents towards further immigration that are triggered by economic considerations. We develop an economic model motivating the empirical work that takes a broader view on these issues than previous papers. We provide empirical analysis that is based on data more specific and better suited to pick up the many channels of economic interest through which benefits and costs of immigration may be felt. Results support previous literature in establishing strong associations between individual characteristics and a wide range of responses to questions relating to perceived impact of immigrants on economic outcomes. Our analysis points towards harmful effects of immigration on the economy being felt through immigration being a fiscal burden rather than having adverse effects on the labour market.

This study aims to introduce an education sector which transforms a part of unskilled labour into new skilled labour, and then show how the level of output of educational service is determined in the short-run equilibrium along with the level of output of two production sectors. This study also introduces intertemporal dynamics into the model assuming that all factor endowments grow over time, and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.

This study considers a three sector open economy model to analyse the long-run economic effects of the anti-immigration policy adopted in the destination country on the general equilibrium of the source country.

If the education sector in the source country is more skilled labour intensive than the advanced production sector, then this anti-immigration policy would raise the capital unskilled labour ratio, skilled labour–unskilled labour ratio and the balanced endogenous growth rate in the new long-run equilibrium but would lower the gross rate of creation of new skilled labour there.

The authors want to analyse the effect of anti-immigration policy adopted in the destination country on the long-run balanced growth rate in the source country. The dynamic growth effect of anti-immigration policy cannot be studied in a static short-run equilibrium model, the authors also introduce intertemporal dynamics into the model assuming that all factor endowments grow over time and then show how a strong anti-immigration policy in the destination country affects the long-run equilibrium of the source country.

The purpose of this paper is to compare and contrast the international trade characteristics of commerce between Latin American countries and some of the top economies in the world, in order to identify new business opportunities for LATAM firms in dynamical external markets.

A triple indexed gravity model, correcting with robust standardized errors clustered, and a panel data analysis was used to obtain the relationship between Latin American countries and advanced and other emerging economies.

The main finding of this paper is that innovation overcomes gravity effects and parameters typical of a knowledge society are the significant ones to explain trade among different regions. The model that includes an innovation proxy accommodates with the new international theories of trade. Besides, communication capacity is essential to reach consumers abroad with newer and more complex products. Moreover, the constant is significant when innovation is included, which may imply intersectoral trade that behaves relatively stable in bilateral trade.

The findings suggest that the economies that have some relevance in trade, have increasing numbers regarding patents. Thus, the empirical findings relate to the theoretical models which state that comparative advantages may be dynamic due to technological innovation.

This paper shows that innovation is a central parameter to engage in intratrade and develop a knowledge-based economy. Latin America sometimes appears to be a puzzle as to how to improve its economic performance and overcome its social and economic problems. Intratrade seems to be the route to increase Latin American business participation in world trade.

El propósito de este documento es comparar y contrastar las características comerciales internacionales del comercio entre los países latinoamericanos y algunas de las principales economías del mundo, con el fin de identificar nuevas oportunidades de negocios para las empresas de LATAM en mercados externos dinámicos.

Se utilizó un modelo de gravedad triple indexado el que se corrigió con errores robustos estandarizados clusterizados, y un análisis de datos de panel para obtener la relación entre los países latinoamericanos y las economías avanzadas y otras economías emergentes.

Uno de los principales hallazgos es que la incorporación de la innovación en el modelo anula el efecto de las variables típicas asociadas a la gravedad. Por lo que se podría suponer que, los parámetros propios de una sociedad del conocimiento son más importantes para explicar el comercio entre las diferentes regiones. El modelo incluye un variable de innovación que se adapta a las nuevas teorías internacionales del comercio. Otro hallazgo es que la capacidad de comunicación es esencial para llegar a los consumidores en el extranjero con productos más nuevos y complejos. Por último, la constante es significativa cuando se incluye la innovación, lo que podría implicar un comercio intersectorial que se comporta relativamente estable en el comercio bilateral.

Los resultados sugieren que las economías que tienen cierta relevancia en el comercio poseen un número creciente de patentes. Por lo tanto, los hallazgos empíricos se relacionan con los modelos teóricos que establecen que las ventajas comparativas pueden ser dinámicas debido a la innovación tecnológica.

Este documento muestra que la innovación es un elemento central para participar en el comercio interno y desarrollar una economía basada en el conocimiento. América Latina a veces parece ser un enigma sobre cómo mejorar su desempeño económico y superar sus problemas sociales y económicos. El comercio intraindustrial parece ser la ruta para aumentar la participación empresarial de América Latina en el comercio mundial.

We develop a 2×2×2 model of international trade in which one of the sectors is oligopolistic. The oligopolistic sector consists of a given number of a priori identical firms belonging to one of the two countries, but some deciding to locate in the other country so as to realize higher profits. If a firm locates in the foreign country, its technological capability is assumed to go down due to the alien environment. In this framework we examine the effect of the environment on the level of foreign direct investment and on factor prices in the two countries.

The purpose of this paper is to examine empirical characteristics of two commonly mentioned expressions of international financial crisis, “sudden stops” and currency crises.

Sudden stop and currency crisis events are identified and empirical regularities among them are analyzed based on the annual data of 25 emerging market countries from 1990 to 2003.

Puzzlingly, these two seemingly close expressions of crises overlap less than 50 percent of the time and sudden stops more frequently precede than follow currency crises. Also the two different sudden stop measures are not strongly correlated with each other.

This shows that it can make a great deal of difference what measure is used and suggests that studies in this area should be sure to check the robustness of their results to different measures.

The authors think that the proper analysis should focus on how to use these different measures to understand the nature of the crises. Thus, sudden stop and currency crisis measures should be used as complements, rather than substitutes.

The alarming frequency of the emerging market crises during the last three decades has motivated a large volume of theoretical and empirical literature on the subject. The paper's results advance understanding of these events.

A large body of studies on currency crises coexists with a growing literature on sudden stops yet a majority of the studies that investigate either one of these phenomena do not mention the other. The paper adds value by investigating empirical relationships between them.