International regulation and regional development: Consequences of the single European market for small and medium sized enterprises in Portugal

Abstract

In seeking to understand contexts for regional development an increasingly important element is the growing influence of international institutions and agreements in the regulation of economic systems. Within Europe the economic liberalization and increased market competition encouraged by the Single European Market (SEM) has been widely predicted to benefit larger elements of capital and core regions of economic activity at the expense of Europe's smaller firms and less favoured peripheral regions. Through analysis of results from empirical research, this paper will analyze the impact of the SEM on small and medium sized enterprises (SMEs) in north and central Portugal. The significance of sectoral and spatial variations in impact are examined by considering two industrial sectors, food and clothing, and the effectiveness of firms’ responses and policy initiatives in mediating the potentially negative impacts of Single Market competition are evaluated.