Industrialisation in Developing Countries and Consequent Trade-Related Restructuring Constraints in Finland
Abstract
The thesis investigates the implications that the changing pattern of the international division of labour due to Third World industrialisation has had on Finnish industrial and trade structures. The first three chapters offer the backround for the rest of the exercise by presenting a) existing theories explaining structural changes in the international division of labour, b) some factors of the Third World industrialisation process and c) the pattern of the international specialfsation of the Finnish economy. The following three chapters form the core of the study by examining the effects of the new industrial competition within three possible market areas: a) import penetration into Finnish home markets, b) imoort substitution in the markets of developing countries themselves and c) export competition in a third market. In particular, the adjustment constraints of the two Finnish net export sectors – the garment and forest industries – are investigated separately. In the last chapter the transfers of production capital and technology are investigated in order to illustrate the stage and pattern of the internationalisation of the Finnish economy.
It was found that the structural characteristics of the Finnish foreign trade and industrial specialisation are somewhat similar to those of industrialising developing countries. Hence, for Finland the Third World industrialisation process is potentially competitive compared with the most advanced industrialised economies. Finnish economic relations with the Third World have been very meagre, and hence the import penetration effects in the home markets and the import substitution effects in developing countries have remained very limited. In contrast, the major restructuring constraints may be due to the intensification of export competition. During the 1970’s Finland’s export market shares shrank slightly, partly owing to increased Third World exports, particularly in those sectors upon which its relative industrial competitiveness and specialisation have traditionally been based. Nevertheless, for the time being, Finland has succeeded quite well in adjusting to the increasing Third World competition in its net export sectors. In the footwear and clothing industries the relative success has been dependent on the existence of the bilateral trading network with the Soviet Union as well as on the way of specialising in high-fashion goods and special products. In the forest industry, the Finnish competitiveness today is based on high-yield paper products which enjoy preferential tariff treatments in the main export markets of Europe, and hence, in the short term, the Third World competition will not be very severe.
- ISSN: 0358-5980
- ISBN: 951-9281-50-9
