The Three Myths of Globalization

Abstract: To many people, globalization is an inexorable process in which cross-border competitors become more concentrated, increasingly produce where it is most cost effective to do so, standardize the product varieties on offer and are rewarded with sustained “globalization premia.” Global cross-industry datasets, the global auto industry and other case studies are used to probe these intuitions about industry dynamics, none of which seem to be supported broadly. And some of the mistakes that misconceptions about global industry dynamics may engender are reviewed.