Introduction

Since the early 1980s, there has been, a continuing debate about the competitiveness of West German and, more generally, European suppliers of manufactured goods on world markets. Food for this debate has been provided by declining shares of European manufactured exports in world exports of manufactures which have been observed since the late 1970s, Views differ with respect to the causes for this decline. The subsequent analysis contributes to this debate by assessing the competitive position of European suppliers in the fast growing markets of the Association of Southeast Asian Nations and by tracing major determinants for the weak performance of European companies in those markets. Economic reasoning suggests that European firms operate in a framework of incentives which render exports to and investment in other markets more profitable than such business relationships with Association of Southeast Asian Nations countries.