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Globalization, International Corporate Alliances, and Political Conflict: The Experience of the US Airline and Telecommunication Industries

Published online by Cambridge University Press:  20 January 2017

Jonathan Crystal
Jonathan Crystal*
Affiliation:
Fordham University
*
Department of Political Science, Fordham University, 441E. Fordham Rd., Bronx, NY104 58, USA.
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Abstract

The globalization of production simultaneously opens up new opportunities for firms and threatens them with intensified foreign competition. Studies of the resulting producer demands for commercial policy have not yet incorporated two recent trends: the increasing significance of the trade in services and the proliferation of international corporate alliances. With two US industries (airlines and telecommunications) as illustrative case studies, it can be seen that, to a surprising extent, even competitive global industries will seek to block foreign competitors from entering local markets via alliances. The level of political conflict in response to these alliances is related to the issue of market access at home and abroad. Market barriers abroad provide global producers with the motive for seeking contingent restrictions. Restrictions at home give domestic firms the opportunity to oppose alliances without worrying that competitors could enter the market through foreign direct investment. The model suggests some important differences in the political reactions to globalization between service and manufacturing firms.

Type
Research Article
Information
Business and Politics , Volume 1 , Issue 3 , November 1999 , pp. 343 - 373
Copyright
Copyright © V.K. Aggarwal 1999 and published under exclusive license to Cambridge University Press 

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