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Diversification and Internationalization in the European Single Market: The British Exception

Published online by Cambridge University Press:  14 June 2017

Abstract

This article examines the long-run impact of the 1992 completion of the European Single Market on the diversification and internationalization of European business. It does so at a particular moment of crisis: the exit of the United Kingdom from the European Union (“Brexit”). The article finds that completion of the European Single Market is indeed associated with significant and widespread changes in the strategies of European businesses between 1993 and 2010. European business has converged on more focused diversification strategies and followed similar patterns of internationalization. The most significant exception is the consistently low level of British business's commitment to European markets. The distinctiveness of British internationalization is, in a sense, Brexit foretold.

Type
Research Article
Copyright
Copyright © The President and Fellows of Harvard College 2017 

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References

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35 Although our data is based on a quantitative diversification measure and therefore differs from the qualitative measures of the Harvard Studies tradition, we can offer some indicative comparison due to the convergent validity of the measures; see Hoskisson et al., “Construct Validity.” Previous studies have shown that for France, the proportion of firms adopting a diversified strategy increased from 36 percent in 1950 to 59 percent in 1993. In Germany the proportion of diversified firms increased from 40 percent in 1950 to 77 percent in 1993, whereas in the U.K. the figure increased from 27 percent in the 1950's to 82 percent in 1993. See Channon, “British Enterprise”; Dyas and Thanheiser, Emerging European Enterprise; Dyas, “French Industrial Enterprise”; and Whittington and Mayer, European Corporation.

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