10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Logics of value chain configuration and transnational cooperation: the role for firms and
emerging economies of WTO
Vittoria Marino – Associate professor of International Marketing – Facoltà di Economia –
Università degli Studi di Salerno - Italy
Carmen Gallucci – Associate professor of Global Marketing – Facoltà di Economia – Università
degli Studi di Salerno - Italy
Paola Zoccoli, Phd – scholar of International Marketing - Facoltà di Economia – Università degli
Studi di Salerno - Italy
October 15-16, 2010
Rome, Italy
1
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
ABSTRACT
The intensification of International trade flows and the change in their framework and direction
has resulted in more openings of national boundaries and has made way for international trade to
pass into the domain of international institutions. More flexible systems of trading have resulted in
less influential state intervention on a local scale and national authority has been by-passed by a
network of international relations that have undermined national dimensions. The result has been a
multinational dimension of international trade flows leading to the redefinition of the roles of each
component of the international trade system, in an emerging multilateral realm steered in part by
the World Trade Organisation (WTO).
Our purpose is to examine by means of a survey carried out in Tunisia from a value resources and
clusters analysis perspective, the role exerted by international organizations such as the WTO in
creating competitive advantage in a nation where on the basis of a free interpretation of Porter's
concept, the WTO “governs” a homogeneous geographical aggregation.
keywords: international trade, value chain, convergence, international strategies, regional clusters
1. Foreword
The intensification of international trade flows and the change in their framework and direction
has resulted in more openings of national boundaries and has made way for international trade to
pass into the domain of international institutions. More flexible systems of trading have resulted in
less influential state intervention on a local scale and national authority has been by-passed by a
network of international relations that have undermined national dimensions. The result has been a
multinational dimension of international trade flows leading to the redefinition of the roles of each
October 15-16, 2010
Rome, Italy
2
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
component of the international trade system, in an emerging multilateral realm steered in part by
the World Trade Organisation (WTO).
Paradoxically, in this system Low Developed Countries (LDCs) and New Industrialized Countries
(NICs) have taken on a new role thanks to their ability to supply besides raw materials, products
and merchandise that are no longer made in industrialized countries. Hence, the resulting reshaping
of trade relations between countries in the process of development and developed countries and the
new implications for re-formulating the value chain.
New dynamics in value creation finds a strong common denominator in geographical and territorial
homogeneity in a socio-economic sense where new pathways of development can be delineated,
with co-evolving processes involving local stakeholders and international organizations, including
the WTO. The capacity of the WTO to influence the competitiveness of a territory is investigated in
this study.
Our purpose is to examine by means of a survey carried out in Tunisia from a value resources and
clusters analysis perspective, the role exerted by international organizations such as the WTO in
creating competitive advantage in a nation where on the basis of a free interpretation of Porter's
concept, the WTO “governs” a homogeneous geographical aggregation.
2. Convergence in the international trade system and the role of LCDs/NICs
World trade of goods from the 1950s onwards has developed at a much faster rate than
production and the trend has continued to date : nowadays the scope of international trade is 16
times that of the Fifties, in the face of a five and a half fold increase in population (World Trade
Statistics, 2009; Trade profile, 2008). Further confirmation is to be found in the percentage of
exports equal to 15% of world GDP compared to 7% in 1950. However, nowadays, besides the
significance of macroeconomic data, it would be interesting to analyze the extent and dynamics of
financial variables. Financial flows crossing national boundaries move more and more rapidly,
October 15-16, 2010
Rome, Italy
3
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
thanks to information and communication technology (ICT) and to fewer national trade barriers and
regulations. Movement of capital strongly influences more and more international trade. The lesser
importance and force of national barriers and the greater dimensions of trade flux would seem to
confirm the dynamics of political and economical convergence (Robertson,1985). However,
statistics do not confirm any general trend towards convergence in levels of production,
circumscribed as it is, to a small group of nations capable of investing in production, infrastructure
and education to a sufficient degree. Certainly, all this is favored by inter-connections in terms of
information with relevant repercussions on different geographic communities involved in foreign
investments even in terms only of comparative advantage on the part of firms belonging to nations
that have adequately developed their levels of production, infrastructure and education
“The poorest countries have been left out of this scenario and institutional setting interested in
economic development … and remind us that convergence has been never an automatism, because
it is combined with the choice and the application of an appropriate strategy, given the changes in
the order of international trade and in depth technological innovation processes ” (Boyer, 1998).
The concept of one best way is very intuitive and well in line with neoclassical literature theory: if
all economies could be managed without cost and if institutions could be split up and choices fully
independent, then convergence would be the rule.
Insert figure 1
The intensification of international trading has not only opened boundaries to facilitating
specialized production but has also delineated specific advantages for national systems as classic
international trade theories confirm (Heckscher and Ohlin; Stopler and Samuelson) enriching or at
least modifying them to a greater or lesser degree. These conditions determine the analysis and
definition of inter-and intra-system compatibility; or in other words, the need to identify points of
encounter, coordination and dialogue and where relational networks (the only kind capable) define
October 15-16, 2010
Rome, Italy
4
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
and put in place trade flows and delineate new conceptual maps of national realities. Structural
relations, however are not the only elements involved,
aims, objectives with corresponding
organizational/structural mechanisms of coordination are also necessary and these are provided by
institutional elements.
Institutionalization is needed only at supra national level, in other words with the emergence of a
viable realm where logical schema are defined that need appropriate governance for survival and
development. Consequently, if convergence exists, it is related to those aspects that effectively find
consistence in a transnational dimension that needs to be governed precisely on this scale. This does
not mean the elimination of national systems/structures that remain and continue to play their part
in the context of functions conducted in the national sphere and which on the other hand, are
components on a local scale, of the emerging entities on a supra-national scale.
In a systemic perspective the dilemma/paradox of bypassing nations and national authorities can be
explained in contextual terms Such issues, specific contexts such as economic and trade scenarios
are placed and shared transversally, over and above national level on a higher plane, no longer
atomistically placed, managed and directed inside nations boundaries but prospected within a
“community” dimension.
The perspective is not that of national authorities but rather their switching to or substitution in
specific areas of action that transcend the national dimension and with their placement on the
supranational plane. This is not simply a case of regulating but rather, of deregulating the system in
order to effectively govern it effectively. Obviously an institutional model is necessary; or in other
words, an alternative framework. In this respect, the institutional approach represents a logical
scheme of reference responding to the need for weaving relations and interaction to make such a
system functional. In this context, the logics of institutionalism can contribute to analyzing changes
in place over a period of time, in the range of regulation, in their objectives and functional
mechanisms. The institutional element, it should be noted is one of the components of a systemic
scenario underpinning its structure in terms of international trading; together with elements that are
October 15-16, 2010
Rome, Italy
5
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
the essence for its evolution: in other words learning and consolidated knowledge mechanisms,
operational strategies for the creation and functioning of the system steering towards achieving its
objectives of survival.
3. Areas and Trends in the WTO system
Over the last 10-15 years trends in international trade have highlighted the changes affecting
economies; these correspond basically, to changes in direction both of trade flows and the
commercial and economic strengths/force of the regional areas from where trade moves. The result
is a reshaping of the map delineating the comparative advantages of the relevant geographical areas
involved as well as that of competitive advantage held by firms thanks to their ability to move in
this kind of context and to
their exploiting and strengthening the value chain in a global
perspective.
Regional integration is a process that has affected a number of nations in recent years and at the
same time, has favored the opening up of country boundaries and multilateral integration seeing as
the countries involved tend to “put in place reforms that are complementary to multilateralism”
(Guerrieri and Caratelli, 2003; Levy and Srinivasan, 1996; Shang-Jin Wei and Frenkel, 1998).
On the other hand, a regional area integration policy would strengthen participating countries as it
would enable them greater comparative and competitive ability with respect to more advanced
political and economic scenarios. Regional integration consequently, becomes instrumental “ to
showing the capacity to deal with the subtle open and shut dynamics operating in socially integrated
worlds” (Habermas, 1999).
Export trends by continental region highlight the slowdown in the incidence of USA exports over
the last fifty five years and on the contrary, the substantial standing of Europe’s position as leader
in this respect. [1].
October 15-16, 2010
Rome, Italy
6
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
This together with a series of factors: exports, imports, internal production, consumption and
consumer preference trends, delineates the profile of emerging economies such as LDCs (Least
Developed Countries) and transition economies such as NICS (New Industrialized Countries)
(NICs).
In recent years, firms from regions that had little or no significance previously in the world
economic “scenario” have acquired more and more “weight” – for instance countries from the Far
East[1] and China – are redesigning relations and acquiring more influence by virtue of their
consequent new economic position and role.
The increase in trade value relative to merchandise from countries with low-cost labour has created
new strains in businesses relying on traditional technology[3] (ICE-Prometeia, 2004; ICE-Prometeia,
2008).
New technology and innovation, focal elements for rapidity in the exchange of merchandise and
information have redesigned the relative variables: ranging from consumer power and preference
and the consequent pressure for expansion on firms and the relevance of fixed costs, not to mention
the role of currencies and that of regional or national areas. Thus the convergence theory
emphasizes not merely any static similarity but the progressive accumulation of common features
(Gaitonde, 1974).
The convergence of consumer preference combined with technological progress as well as the
significance of transnational segments has had significant results on fixed costs. Similarities, i.e
convergence, pushes businesses towards national (and supranational) expansion in a new way. No
longer an alternative strategy but a competitive need to deal with the incessant flow of information.
This information is essential for communicating to consumers preferences and trends that can
easily be shared or imitated and for identifying objects/merchandise with which consumers can
identity themselves and become part of a unique global /population (Wallach and Sforza, 2000;
Klein, 2000).
October 15-16, 2010
Rome, Italy
7
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
However, firms are the units capable of reflecting and moving in supra-national circuits (Gilpin,
2003; Strange, 1998).
On the other hand, they can never be free from the limits of their territories. Territories take on an
entirely new role in firm performance. They are no longer providers of resources, but in an interconnected economy, firms can strengthen their competitive advantage only if they penetrate the
local
context.
This
is
possible
only by
means
of
marked
adaptation
inside
the
destination/localization of their business/activity in term of infrastructure and socio-economic
structures. In other words, a process of “penetration” capable of creating a positive exchange of
wealth on the basis of non-zero sum game theory logics.
In this perspective, the new scenario of business opportunities and mechanisms for opening new
trading relationships can be delineated together with the creating of new margins/ areas for
competition. Therefore, value indicators can be redesigned with respect to the allocating of
advantages linked to specific geographical areas (Zoccoli, 2004) and connected consequently, to the
redistribution of the value chain in favour of the firms involved. Thus, the inter-dependency of
competitive dynamics in the global sector pushes firms to compete on international scenarios
Furthermore, ethnocentric firms that to date have had no interest in modifying or adapting their
business idea to the international scenario, will be forced to spread their innovation policies in
primeval internationalization terms as was the case in the Fifties.
Consequently, the need will arise for new forms of trading relationships and coordinating
mechanisms to regulate relationships with emergent economies. These mechanism have to be based
on mixed forms of cooperation, such as partnerships, investments and exchange of knowledge
(knowledge management) that are coherent with competitive strategies of integration in the foreign
market (Pellicelli, 1999) where contexts are undefined and still evolving and where firms intend to
reinforce their position or start lasting and flexible relations in destination markets. A similar
strategy is functional for penetratating and remaining in markets that are relevant both in terms of
supply and destination. On the other hand, it is in this perspective that Prahalad and Lieberthal mean
October 15-16, 2010
Rome, Italy
8
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
the overcoming of imperialism (Prahalad and Lieberthal, 2003; Prahalad and OOsterveld, 1999).
New entry firms have to consider destination countries: not as a promised land to conquer but as
destinations in macro segmentation/geographical clusterization framed in relation to their strategic
role in shaping international competition and value creation.
In the common scenario of seeking conditions of maturity for export activities in the shortest time
possible, different conditions result in terms of the speed of diffusion of productive activity and
innovation. It is clear that even in the presence of a common phase, the prospects and dynamics
underpinning the various hypotheses identified, influence lines of action that enable firms to deal
effectively with a situation in context in terms of company objectives.
Strategies and basic solutions to put in place are linked to strong competitive pressures and type of
business, globalized or multi-domestic where there is a strong propensity for partnership and
collaboration in general. On the basis of such criteria, an organisational model can be set up
whereby businesses belonging to countries in a developing phase are able to share product and
process innovations and to experiment new business models. These are solutions that generate
linking mechanisms (Mintzberg, 1995) for appraisal and knowledge transfer (Craig, Douglas, 1987)
by means of markets. Thus a virtuous circle of innovation growth and the holding of market and
international trade positions can be put in place permanently.
The speed of diffusion of innovations has been the main factor of change in market and competition
dynamics. The same element has been an important factor in firm economy and management.
Alongside scale and purpose economies, speed economies have been flanked and in turn have
become elements of globalization or in other words, of the ever greater inter-dependency of the
dynamics of a firm’s activities in a given spatial context. Trade figures confirm that international
trade is made up not only of flows moving from country of origin to destination country but also
and above all, as a result of transfer flows of associations of delocalized firms or those that
outsource their activities thanks to global sourcing or other partnerships. These are the effectively
new elements of business development and firm mobility. The global technological balance sheet
October 15-16, 2010
Rome, Italy
9
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
confirms this view. Skill transfer has become one of the ways to face the issue of velocity of
competition. Both in strategic and operative terms, firms by means of partnerships and alliances
increase their capacities through acquiring innovation processes. Furthermore, with the transfer of
activities, in the phases of maturity and that of both ulterior technological consolidation and of the
market, an authentic cross-fertilization process of the consolidated market is started as well as the
capacity for development of emergent economies or of newly industrialised economies. In this
respect, a similar approach could be put in place to define solutions for the loss of competitiveness
in many businesses such as those of the Italian fashion system. The key is finding elements of
synchronism that globalization generates through the linking point/dialectics between the structural
differences of comparative systems and their capacity to generate and extract resources from such
diversity (Habermas, 1999).
Resource factors and regional competitive advantages determine and define business specializations
which (see Fig. 1) redefine the relational influences and institutional frameworks.
This process has already occurred in the international trade system framework by virtue of
channels of access and the degree of governance exerted by the WTO. In this sense, there is a direct
relation between the new structure the systems of rules and the effect on business strategies, due to
the impact on advantages relative to individual firms, and relative to the areas themselves.). (figure
2).
Insert figure 2
In this respect the Chinese region comes to mind, where as a result of development (albeit not
steady) over the last few years, there has been great demand for commodities (copper, oil …) to
build infrastructure necessary for creating the foundations for social and economic growth. At the
same time, China is a significant manufacturer of traditional technology and low cost merchandise.
This is an emblematic case of altering competitive relations in an international context, but it is
October 15-16, 2010
Rome, Italy
10
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
even more illustrative of the new configuration of competitive relations and structural profiles of the
relations being created with African nations (World trade statistics, 2008). These countries despite
an increase in their GDP, remain the geographical areas with the lowest growth rate despite having
strong resources which with difficulty, can be made available for international trading. On the basis
of these factors, potential opportunities for business and relations can be created between developed
countries and emergent economies (NICs and LDCs) by means of multilateral agreements needing
urgent revision such as that of TRIPs (Trade Intellectual Properties). In this context all the issues
deriving from the erosion of market shares through supplies produced in emergent areas .are
regulated in terms of trading goods for traditional technology without abiding by property rights and
laws and protection for innovations. These issues are not simply tangles to resolve by technical
solutions but are opportunities for cross fertilization in making and protecting innovation; sources
for partnerships, technological exchange and collaboration based on knowledge creation.
4. Research Hypothesis and survey methodology
On the basis of the above considerations, our research hypothesis examines government
capacity to create trans-national areas with flexible local structural boundaries characterised by
specialisation. In this scenario dynamic systems of production and training can be implemented
whereby economic benefits can result and the competitive advantage of such areas compared with
other realities, favoured .
In this context, institutions take on a fundamental role but in particular, if the type of influence
and decisive variables are well known, less evident but just as important are the functions carried
out by international organisations such as the World Trade Organization.
In the light of the above considerations, our research hypothesis can be summed up as follows:
1.
clusters of productive, administrative and territorial forces can create competitive
advantage for a territory;
October 15-16, 2010
Rome, Italy
11
10th Global Conference on Business & Economics
2.
ISBN : 978-0-9830452-1-2
A direct and institutional link exists between main stakeholders and international
Institutions including the WTO;
3.
the awareness of the role of the WTO and that of local and district government
determines trust and increases knowhow and co-evolving strategies;
4.
the inter-relational structure generates a system of coordination by external cluster–type
economies, modifying and placing along a continuum even the means of entry to the
countries involved.
As concerns the first hypothesis regarding the generation of advantages for economies as a
result of aggregating forces. This is envisaged in the sense of co-presence and unity, underpinned
by characteristics in common, whereby harmony in terms of elements, functions and use of
structures and infrastructure is determined. The reference is to aggregations of productive,
administrative and territorial forces, converging in a unifying relationship which can be identified
by analysing the variables that influence relational territory characterised by typical links in
conformity with Bayesian logic (Binder, 1978) and developed in later studies (Fomin &Zelevinsky,
2002). However, as Binder maintains, the algorithms, or in other words, the decisive factors or
forces and the functional and interactive dynamics of the component clusters play an extremely
important role. The crucial elements of the analysis lie in the defining or in revealing (in a natural as
opposed to a deliberate sense) the factors at the basis of such uniformity. The most elementary kind
of uniformity can be constituted by spatial dependency created in any geographical environment
(Fingleton, 1988) however, as evidenced from statistics in recent years, instances of uniformity
emerge from spatial affinities but have to be managed, governed, identified and directed seeing as
they can lead to the definition of common resources in trading flows (Jones, Hesterly and Borgatti,
1997) thus generating added value and wealth. This is not the case however, unless the underlying
process, i.e forms of interaction, directions and decision making in other words, the methods of
governance of such inter-dependency and resources, is specified.
October 15-16, 2010
Rome, Italy
12
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
The operative and productive components including goods and services to industry both
administrative and institutional, are rooted in a creative socio-productive context coordinated by ties
not only of a hierarchical but also of a social and relational nature. The outcome is strategic
management in common, in terms of the development of the components involved as well as the
economic and spatial area of territory thus delimited.
Consequently, it emerges that the contours of space from the point of view of governance, are
ever more blurred as concerns their dependence on various institutional flows which, if in a local
context can and should be enjoyed by exploiting geographically specific resources. At the same
time, influences of a wider nature cannot be neglected, in other words, relations if not on an
aggregation scale, at least on an attraction level in which general issues should be concentrated
(Marino, 2005). The presence of the WTO means the selection of type of pressure, issues and
analysis, becoming the fulcrum of a wide and general system of trade relations in whose statutory
elements of directives and agreements reside strong features and inspiring guidelines for creating
the basis of local development (Zoccoli, 2007).
The fourth hypothesis develops the causality existing between clusters of local territories where
similarities and homogeneities are coordinated and managed by a-specific rules that favour not
merely the crossing of (national) boundaries, but also the putting in place of treaties and alliances
on the part of supranational organizations to guarantee respect of rules and coordination; the latter
not meant in a bureaucratic sense, but in a social sense that has its source in the historic and social
similarities of the territories involved. Thus a substratum of conditions is created that enable the
setting up of productive plants or retailing areas that do not have to pay the price of adapting to
legal, administrative or fiscal barriers.
On the basis of the hypotheses formulated, an explorative survey was carried out with respect to the
creation/development of potential trade relations between Italy and the Tunisi area. The survey was
prompted by the need to identify the peculiarities of a common area in Italy and Tunisia
characterised by common, converging structural features but which in an evolving perspective, goes
October 15-16, 2010
Rome, Italy
13
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
way beyond individual national boundaries/borders. Metaphorically speaking, “a bridge between
these two nations” which crosses and embraces the sea, seen in terms both of a resource and as a
trading platform for the southern banks of the Mediterranean area. It is precisely this projection of
collective imagination that best contributes to the idea of a trans-national cluster where virtuous
cycles of entrepreneurial development are generated and expanded.
Tunisia’s position as an emergent economy, collocates the country at the centre of the international
economic system – in the sense of a global vision of continual interaction and inter-dependency - in
a system that is extremely useful for the country’s economic growth process, which otherwise, by
being confined within its national boundaries would impede the country from undertaking virtuous
cycles of development and from enjoying the benefits deriving from growth on an international
scale.
The analysis of the features of the economic system that connote creation of value in the Tunisian
economy has been conducted utilizing Porter’s diamond model. The model combines static features
with dynamic elements, highlighting those factors characteristic of the country and those made
available by the system. The difference between the two conditions is not negligible as evidenced
by studies on international economics (Kravis, 1956) in that a quantity of factors merely express a
country’s potential but this does not necessarily mean that such potential has been exploited to the
full. This occurs only when the relevant factors are in a condition to be inserted in the process of
economic development and consequently, in the creation of value of the country as a system.
To complete the analysis of the country’s position, an evaluating perspective was included
regarding the position attained by the country within the international competitive system on the
basis of a strategic logic approach (Marino, 2005). The object and consequently, the target of the
survey was identified in the Tunisian economic operators belonging to different sectors of the
economy. It was considered that in an exploratory phase, such as that in which this study is
collocated, the methodology chosen, i.e. based on an opinion sample, could well reflect the level
of reliability in qualitative terms, of the issue investigated. On the basis of this approach, the
October 15-16, 2010
Rome, Italy
14
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
questionnaire was compiled by means of structured questions to ascertain the identity of the most
relevant components in a nation for creating trade relations in a value creating perspective, relative
to the entire country and in a reciprocal manner, to potential interlocutors of other nations.
The structure of the questionnaire consequently, was devised according to the need to collect and
process specific relevant data.
Divided into three sections, the questionnaire focused on the identification of the relevant
economic sector and on the experience in the International field acquired by the interviewee
(questions 1-3) the identification and evaluation of the competitive advantage held by the
nation in the group of questions (4,5,6,8). Question n. 7 and the group of questions from 9 to 12
tended to collect the considerations expressed by individual operators regarding the effects of
foreign investments and of government intervention and that of international organisations such as
the WTO.
The purpose of ascertaining judgements/opinions on the part of the economic actors involved
was based on the consideration that the latter are in a position to delineate the effective state of the
situation especially as concerns the outcomes reached in the economic system. By means of
experience acquired they are able to explain the qualitative aspects of a reality that other observers
might be able to enucleate merely by means of interpretative supra-structures that are not always
correct.
The taxonomy of components inserted to frame or delineate points of weakness and strength
declines factors inherent in the diamond model with specific reference to the Maghreb country,
resulting from economic relations (ICE Tunisi, 2008).
The survey consisted in 18 interviews involving a specialist target of entrepreneurs, export
mediators, public officials.
As can be evinced from data and regarding the business sectors involved, manufacturing (60%) or
retailing (respectively 27.78% and 33.32% ) prevailed while the remaining 40% comprised the
October 15-16, 2010
Rome, Italy
15
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
brokering sector (5,6%) consultancy (5,6%) public administration (16,67%) and the transport sector
(5,6%). Furthermore, the experience acquired on the part of most interviewees (77%) on an
international scale, indicated knowledge with reference to the relevant issues dealt with. An
interesting finding consisted in the fact that of the 77% per cent of operators who had already set up
relations with abroad, more than 50% had done so only from the eve of the new Millenium. This
most certainly would depend on the recent opening of economies and development, the outcome of
the gradual degree of opening of the national economic system.
From the analysis of the points of force it had already emerged how the operators considered the
geographical position a main factor/feature for competitiveness; an aspect confirmed by the role of
Tunisia in the Mediterranean area. 90% of the interviewees are aware of the core importance of
position and of the consequent favourable role it plays and can continue to play in terms of “the
centrality” of the interchange/connection and its geographical position as a “bridge between Europe
and Africa”. These opinions reveal a positive intercultural attitude on the part of the interviewees.
This attitude, and their professional roots, qualify them to express informed opinions on the effects
produced by foreign investments on Tunisia’s economy. Above all, the effect of creation and
contribution to local economic growth/development was pinpointed as well the consequential
positive effect of job creation. In many cases, they agreed that foreign investments also generate
potential for knowledge growth. Their perception of foreign investment reflected on the opportunity
to exchange knowledge resources and to introduce them to in novel development/innovation
processes.
The part of the survey on the importance of the role of public, international and national,
organizations for Tunisian growth in the international economic system aimed to investigate the
opinion of economic actors in promoting development in the country. The interviewees expressed a
positive evaluation on the decisive and positive influence these institutions have in national
economic growth. In this respect there was mainly general consensus, but in particular over 50%
(precisely 55%) recognized the support for growth and development, adding their comments (in the
October 15-16, 2010
Rome, Italy
16
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
item “other”) such as “the contribution of international organizations is necessary” (with reference
to WTO, WB and FMI) and “should” devise activities to protect and support an economic system to
reach and create basic conditions for the development process. The international economic
organization is seen as the organism for achieving basic trade relationships and dialectics of
negotiations in an ever more interconnected economic system. Therefore the expression most cited
by the interviewees was “mise au niveau” to express the main, acknowledged function of
international organizations “to create conditions for …”.
To complete the framework on public organizations (public administration) focus on the effect of
government effect in the local development process and in outlining fundamental dynamics of the
local economy was put in place. On this issue, 75% of the interviewees agreed on the importance of
government on trade policy with respect to opening national boundaries for trade (33%) liberalizing
trade (33%) and as a result, more licences or tax-free/reduced taxes on investments and devising tax
incentive schemes (33,33) as well as for partnerships (11%).
All the interviewees agreed on the issue of competitiveness and considered as a positive outcome
the ability to influence change. None of the professionals considered that the situation could be at a
stalemate after government or supranational organization intervention. 61% of the responses agreed
that the entry of foreign investors encourage negotiations and widens and enriches market
relationships. Other responses indicate that there is also an effect on local firm supply (22%) simply
by being in the nation territory (22%); some (6,6%) specified that this had favoured an increase in
GDP.
Foreign investment, in the opinion of interviewees, has also influenced demand, both in terms of
businesses and consumers.
They noted that encouraging the entry of foreign investors has an incremental effect because of the
increase in other foreign investments (55%), but also provides greater availability of consumption
goods(28%) and for commodities (11%).
October 15-16, 2010
Rome, Italy
17
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Besides the findings from the survey, further considerations can be made comparing the different
factors involved. On the basis of data findings, domestic competition and national demand play a
relevant role. Opinions on the effects of foreign investments on domestic situations are positive.
And in this context, the role played by international organizations and local government is
considered fundamental. Government action and ways of implementing and favouring investment
attractiveness whose visible effects such as increases in employment and available income for
spending on consumption, are also considered positively.
Findings from the Survey referring to positive trends over the last few years, delineate a positive
context both for consumption and for investments which creates jobs and income for consumption.
Insert figure 3
The role of International organizations, even though their influence is indirect in terms of internal
system firm performance, creates positive conditions for stability and encourages local public action
favouring intervention both on a local scale and in terms of international relations with governments
and entrepreneurs in the international landscape and with Associations of entrepreneurs (e.g.
Confindustria).
5.
Conclusions
In the Mediterranean area under investigation, as concerns trade and business relationships
between Italy and Tunisia, various common denominators emerge from a socio-historical
perspective, in the area called mare nostrum which washes the shores both of countries. Common
experiences have been shared throughout their history of trading, the outcome being the creating of
October 15-16, 2010
Rome, Italy
18
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
unifying factors that have been decisive in periods of crisis in tackling and solving problems and in
finding new paradigms for survival (D’Egidio, 2008).
Growth of GDP in Tunisia during the period 2004-2009 was 4,58% (CIA Factbook, 2009; OECD,
WB statistics) taking into account that in 2009, the effect of the world economic crisis was evident.
The growth rate was in line with that of African countries but lower than that of oil based
economies of the continent (Angola, Chad, New Guinea and Sudan) (World trade statistics, 2009).
As Tunisia is not an oil economy, the country is excluded from the development processes linked to
the relative fuel industries..
In any event, data on growth highlight the efforts being made to enable the economic system to
achieve growth rates at least in line with those of lower growth OCSE countries (ICE Rapporto
Paese Tunisia, 2008) evidenced by their gradual integration in the world market.
In this macro-economic scenario, findings from the survey indicate interesting results as regards
the structure of national competitive factors. The latter show a positive trend for sectors such as
food, textiles and tourism while showing negative trends as concerns infrastructure in terms of
efficient connections with Europe and industrialised countries generally speaking, access to capital
and as concerns the current rate of development, innovation and the characterising features of the
entrepreneurial system (16% of the cases indicated by the interviewees). The relative picture
compared with the Italian scenario, presents several elements in common; above all, in the
productive framework, the strong sectors of which have traditionally been textiles and food, as well
as tourism.
This specific traditional quality is especially interesting from a twofold perspective for Italian
entrepreneurs. The reference here is to industries that are rooted in culture or in other words,
dependent on transformation technologies that are specific, selected and consolidated over time and
survive by virtue of processes of natural selection.
October 15-16, 2010
Rome, Italy
19
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
It is true to say that that traditional industries are generally characterized by a low degree of
innovation compared to other industries and for that reason, are more vulnerable in a competitive
perspective. A kind of overlapping could be conceived but in actual fact, this is not the case.
The stages of development and the type of competitive advantage relative to the two countries
considered (Italy and Tunisia) differ completely as regards development issues while are
complementary in terms of the type and nature of advantages.
As we have observed (Marino, 2006) on other occasions, these are scenarios which urge for
integration and inter-sector trading. A good policy would be to create partnerships capable of
maintaining and controlling the diffusion of technological advantage relative to Italian firms and at
the same time, to recreate the same together with firms belonging to lesser developed economic
systems. A structural solution based on cooperation and alliances of a transnational nature by
means of external networks such as those of Italian business cluster districts, would be ideal.
In the case of Tunisia, there are suitable conditions for creating network structures based on
joint relations of a contractual and ownership type. Relations concerning supplies, outsourcing etc.,
can be combined with those of direct foreign investments and the subsequent creation of conditions
of developed know-how. In effect, by virtue of the specifics and foundations created by relations of
a business cluster district nature, economies of range of action and speed within the circuit of
entrepreneurial units linked up by a
network/reticular relationship would be achieved. Scale
economies could be reached not only with supplies, but also with joint production collocated both
on the large scale market of the North African regional area and the Euro-Mediterranean Basin. The
network/weave of relations deriving from contractual cooperation and otherwise, would imply the
generating of resources and knowhow in a perspective of improvement (Metallo, 2007).
Globalization highlights the importance of trading merchandises and services to create wealth
(Krugman, 2008) for nations and firms and above all, accentuates the relational networks
characterized by the greater speed and circularity resulting from the reduced timescales in which
they are built. As a consequence there is a crucial need to open up national boundaries, in line with
October 15-16, 2010
Rome, Italy
20
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
policies already part of early Twentieth century thinking. Currently, it would be advisable to take
into consideration the new order of allocation and distribution for achieving comparative
competitive advantages in terms of nations and for businesses that are reshaping strategies and
means by virtue of which, they can compete and create value. A nation’s comparative advantage
has to be preserved by means of a super partes regulatory organism and the foundations laid for
creating competitive advantages. An international rule-based system, would enable the harmonizing
of production activities in order to pursue the best conditions for development within the local area
from where firms have originated and for businesses eventually aspiring to entry. In this process the
trends relevant to emerging countries take on a fundamental role.
The role the WTO occupies in regulating the action and the influence in processes of opening
boundaries to trading, is a further element in the creation of competitive advantage for such nations.
As our research has shown, albeit not directly involved in the creation of value or in Porter’s terms:
competitive advantage, the contribution offered by the international organisation underpinning
international trade, is it is true, a secondary factor, but in any event, quite influential.
Firms need to grasp these opportunities and to understand how changes impact on their strategies
and on access. In conceptual terms, such changes demand a greater degree of competence and more
dynamic levels of elaboration; characteristics present in integrative market channels to be kept in
mind both by the firms working locally and firms that aspire to penetrate the territory.
For instance, in a hypothetical Euro-Mediterranean tourism circuit, external scale economies
both in terms of plants and demand could follow. In the first instance, the sole condition of
involving the different tourism operators over a wider area, would offer the opportunity of
identifying a common system for room availability, the number of stays available, and the rendering
uniform of procedures in individual sectors. Scale economies of demand would have their origin in
the widening client target.
October 15-16, 2010
Rome, Italy
21
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
One result would be speed-scale economies starting from the elaboration of the supply system,
from the moment of defining attributes, to the eventuality of contributions from the tourism sector
(from beach tourism to alpine tourism).
An instance of close networks of cooperation and trading can be found with reference to the era of
the Venetian Republic when the art of the master glaziers and ceramic artists of the lagoon was
learned and taken up by the North African populations, while as regards civil development and
cognitive knowhow, these were transmitted to the European populations by means of the Averroé
code.
6. References
Berger Shelley L., Dore Ronald, 1998, Differenze nazionali e capitalismo globale, Il Mulino:
Bologna.
Binder David .A, 1978, “Bayesian Cluster Analysis”, Biometrika, 65 (1): 31-38.
Boyer Robert, 1998, “L’ipotesi della convergenza rivisitata”, in Berger S., Dore R., Differenze
nazionali e capitalismo globale, Il Mulino: Bologna.
Craig Cora L., Douglas Susan. P., 2000, “Configural advantage in global markets”, Journal of
International Marketing, 8(1).
D’Egidio Alessio, 2008, “Mediterraneo e oltre … Prospettive per un dialogo interculturale tra le
sponde del Mediterraneo”, Prospettiva Persona, 2008 (1).
Fingleton Bernard, 1988, “Categorical Data with Inherent Spatial Dependence: The Case of Cluster
Sampling”, Transactions of the Institute of British Geographers, New Series, 13(4): 497-503
Fomin S., Zelevinsky Andrei, 2002, “Cluster algebra I: Foundations”, Journal of the American
Mathematical Society, 15(2):497- 529.
Gaitonde V. A., 1974. “An Answer to the Theory of Convergence”, Social Scientist.
October 15-16, 2010
Rome, Italy
22
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Gandolfo Giancarlo, 1994, Corso di economia internazionale. Volume primo. La teoria pura del
commercio internazionale, Utet libreria:Torino.
Golinelli Gaetano M., 2000, L’approccio sistemico al governo dell’impresa. L’impresa sistema
vitale. Volume primo, Cedam:Padova.
Guerrieri Paolo, Caratelli I., 2003, “Multilateralismo e regionalismo negli accordi commerciali”, in
Rapporto Ice 2002-2003. L’Italia nell’economia internazionale, ICE:Roma;
Gilpin Robert., Economia politica globale. Le relazioni economiche internazionali nel XXI secolo,
Egea, Milano, 2003;
Guerrieri P., Caratelli I., 2003, “Multilateralismo e regionalismo negli accordi commerciali”, in
Rapporto Ice 2002-2003. L’Italia nell’economia internazionale, ICE:Roma.
Habermas Jurgen, 1999, La costellazione postnazionale. Mercato globale, nazioni e democrazia,
Feltrinelli:Milano.
ICE-Prometeia srl, 2004, Evoluzione del commercio con l’estero per aree e settori, (2) ICE:Roma.
Jones Charles, Hesterly William S., Borgatti Stephen P., 1997, “A General Theory of Network
Governance: Exchange Conditions and Social Mechanisms”, The Academy of Management
Review, 22(4):911-945.
Klein Naomi, 2000, No logo, Feltrinelli:Milano.
Kravis Irving B., 1956, "Availability" and Other Influences on the Commodity Composition of
Trade”, The Journal of Political Economy, 64(2): 143-155.
Levy Philip I., Srinivasan T. N., 1996, “Regionalism and the (dis)advantage of dispute-settlement
access”, The American Economic Review, , May:Nashville.
Shang-Jin Wei, Frenkel Jacob A., 1998, Open regionalism in a world of continental trade blocs,
International Monetary Fund. Staff Papers - International Monetary Fund:Washington.
Marino Vittoria, 2005, Il governo dell’impresa nella prospettiva delle relazioni internazionali,
Franco Angeli:Milano.
October 15-16, 2010
Rome, Italy
23
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Marino Vittoria, 2006, “Il modello del Ciclo di Vita Internazionale del Prodotto applicato ai sistemi
distrettuali della moda”, Sinergie, 69, gennaio-aprile.
Metallo Gerardino (edited by), 2007, Management e sviluppo, Giappichelli editore:Torino.
OECD, 2006,, Country classification as July in www.oecd.org, download del 02.03.07.
Ministero degli Affari Esteri - ICE, 2008 Rapporto Paese Tunisia, in www.mincomes.it, download
del 27.11.09.
Pellicelli Giorgio, 1999, Il marketing internazionale. Mercati globali e nuove strategie, Etas
Libri:Milano.
Porter Michael.E., 1987, Competizione globale, Isedi:Torino,.
Porter Michael.E., 1990, Il vantaggio competitivo delle nazioni, Isedi: Torino.
Prahalad C.K., Lieberthal Kenneth, 2003, “The end of corporate imperialism”, Harvard Business
Review , 81(8).
Prahalad Coimbatore K., Oosterveld Jan P. 1999, “Transforming internal governance: the challenge
of multinationals, in Sloan Management Review, Spring.
Robertson Dennis., “Convergence Theory” in The Penguin Dictionary of Politics, London, 1985.
Shang-Jin Wei, Frenkel Jacob A., Open regionalism in a world of continental trade blocs,
International Monetary Fund. Staff Papers - International Monetary Fund, Washington, Sep 1998.
Strange Susan, Chi governa l’economia mondiale?, Il Mulino, Bologna,1998.
Ufficio ICE Tunisi, “Rapporto sistema paese”, in www.ice.gov.it, download del dicembre 2006.
Wallach Lorri, Sforza Michelle, WTO. Tutto quello che non vi hanno mai detto sul commercio
globale, Feltrinelli, Milano, 1999.
WTO, “World Trade statistics 2005”, in www.wto.org, download del 29.07.06.
WTO, “World Trade statistics 2008”, in www.wto.org, download del 02.10.09.
Zoccoli Paola, “Il WTO e la regolazione della liberalizzazione del commercio mondiale per la
costruzione del vantaggio competitivo della nazione e delle imprese” in Economia e diritto del
terziario, n. 2, 2004.
October 15-16, 2010
Rome, Italy
24
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Zoccoli Paola, Il governo del commercio internazionale ed il WTO, McGraw Hill Company,
Milano, 2007.
October 15-16, 2010
Rome, Italy
25
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Figures
figure 1: National institutional diversity
source: in Boyer R. (1996), “The convergence hypothesis revisited: Globalization but still the
century of Nations?” in Berger, Dore, National diversity and global capitalism, Cornell, Ithaca,
N.Y.
October 15-16, 2010
Rome, Italy
26
10th Global Conference on Business & Economics
ISBN : 978-0-9830452-1-2
Fig. 2: the influence of the institutions on the entry modes
Market Specializations,
advantages, gates to entry
System rules
International trade system - WTO
Firm strategies
coordination
Convergence and institutionalization
Entry modes and kind of investments in
foreign markets
October 15-16, 2010
Rome, Italy
27
10th Global Conference on Business & Economics
fig. 3: survey results
ISBN : 978-0-9830452-1-2
Market Specializations,
advantages, gates to
entry
Rule system
International trade system WTO
positive
80%
Firm strategies
positive
70%
Convergence and
instituzionalization
Homogeneous International
spaces
coordinamento
positive
65%
Entry modes and kind of
investments in foreign markets
[1]
Even if quotas had oscillations since Seventies with a significant slowdown in Eighties, recovering of Ninties held up
consolidating trade importance of west Europe countries. There is also the increasing rate trend of African region
countries and those ones from Middle East. Increasing positions of asian countries is consistent and steady, exempt of
any standstill. Exports from Asia are rising continuously since Seventies until the apex in Ninties. This trend of export
performance is lead by Six Asian Traders.
These countries had also an increasing trend in imports but it is lower in value and rate than exports, and this shows the
enforcement of the economy. However the increase of imports is the proof of the growth because of imports rising
shows the introduction of the imported good in the National economy to have the output that could be exported. The
employment of imports in production process is confirmed also in term of wealth and that of the trend of the
consumption.
[2]
different from Japan
[3]
It’s the case for Italian fashion or house furniture business where competitive dynamics have great pressures that are
the cause for negative performance in last years.
October 15-16, 2010
Rome, Italy
28