This article investigates the development of the Single European Market and its effects on the activities of non-European firms with particular reference to the specific instance of the Japanese automotive industry in trading experience with the EU. This study argues the likely bilateral relationship between institutional development of the EU and possible external consequences on non-European multinational firms that strategic reactions agitated by the perception of trade prospects might affect firms to engage in off-shore transplants to acquire export-platform for the existing markets previously served. In addition, transplants without appropriate localization could result in the issue of local content while firms within the region might be able to experience market presence effects.
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