ABSTRACT
International integration in manufactures in any meaningful sense was thus slight, even though Ricardo's theory of international specialization in cloth and wine production between England and Portugal was developed within this period of manufacture. The final factor affecting the sectoral incidence of protectionism relates to the presence of transnational corporations (TNC) in the chain of international production. The gradual emergence of protectionism in the major markets and the labour-saving nature of technical change have meant that production is more likely to occur near the point of the final market than at the site of least-cost. In considering the potential for industrialization in the countries it is perhaps best to begin with the prospects for systemofacture in these economies. The existence of scale economies in product provides scope for the "world car"; plant scale economies suggest the "world factory" and firm scale economies underwrite the TNC.
