Global Competition and the Nature of Trade in the European Community's Pulp and Paper Industry

Abstract

This paper examines the changing nature of pulp and paper trade patterns within the European Community as these producers responded to increasing global competition between the years 1960 and 1985. As the process of internationalization in the industry intensified during the 1980s, specialization in the trade of individual pulp and paper products occurred between member states. Specialization is explained in the theoretical context of competitive advantage, where corporate strategies and government intervention are emphasized, rather than in the traditional neoclassical context of free markets, or comparative advantage. The nature of trade is measured using Grubel and Lloyd's (1975) B_ij index.

Key words:

• European Community
• pulp and paper industry
• international trade
• competitive advantage