ABSTRACT

This chapter explains that the economic rationales for intra-industry trade such as the simultaneous Finnish exports and imports of children's entertainment and educational products. It also explains some issues relating to global industry structure. The chapter explores how economies of scale help to explain a nation's specialization in inter-industry trade and how economies of scale and product variety assist in explaining intra-industry trade. It illustrates how foreign direct investment affects international trading patterns and presents alternative industry structures, and how industry structure matters in the global economy. The chapter also demonstrates why companies desire to merge across borders, and how international market linkages complicate measuring the market concentration and how governments regulate international merger and acquisition activities. In the early 2000s, differing US and EU antitrust goals caused antitrust authorities for the two regions to reach conflicting conclusions regarding proposed mergers among multinational firms. This has led to preliminary discussions of possible coordination of US and EU antitrust policies.