International Handbook on the Economics of Integration, Volume III
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International Handbook on the Economics of Integration, Volume III

Factor Mobility, Agriculture, Environment and Quantitative Studies

Edited by Miroslav N. Jovanović

With this Handbook, Miroslav Jovanović has provided readers with both an excellent stand-alone original reference book as well as an integral part of a comprehensive three-volume set. This introduction into a rich and expanding academic and practical world of international economic integration also provides a theoretical and analytical framework to the reader, presenting select analytical studies and encouraging further research.
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Chapter 5: Economic Integration from Above and Below with the Evidence of Japanese MNEs in Europe

Ken-ichi Ando


* Ken-ichi Ando 1 INTRODUCTION This chapter examines economic integration in the light of evidence from Japanese multinational enterprises (MNEs) in the European Union (EU). Both MNEs and the EU represent different but mutually related types of ‘economic integration’ in the present global economy, but the point to be stressed first is that the term ‘economic integration’ has no generally accepted definition. As Jovanović (2006) concludes, there is some confusion and conflict among scholars, largely because of the different approaches to the topic. Thus, we shall start by defining ‘economic integration’. ‘Economic integration’ should be understood to have a double dimension; that is, integration from above, and integration from below.1 The former dimension means that the central authority sets the regulatory framework, in order to satisfy the various interests within the geographic area. On the other hand, the latter means that the economic actors construct economic relationships according to the given circumstances, including integration from above. Integration from above and integration from below are mutually related, and it is difficult to determine the causality between them. Like other chapters in this Handbook, integration from below is seen here as the prerequisite for the advancement of integration from above in Asia (Pomfret, Vol. I, ch. 16) and Latin America (Frischtak, Vol. I, ch. 18), though their present situation regarding integration from above is still somewhat primitive, such as the free trade area. On the other hand, the opposite causality can be seen in Europe, even if there are many MNEs which have...

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