State-Firm Bargaining. A case study of the negotiations between Trollhättan, Rüsselsheim and General Motors

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The technological revolution that has taken place during the past three decades and global deregulations of financial markets have put big MNCs in a unique position. These firms no longer need to produce where markets are located but can move and seek cost advantages throughout the world. Stopford and Strange account for the only extensive study of how these changes have affected the relations between firms and states. They argue that states and firms negotiate in order to maximise their wealth. This approach is an assessment of Stopford?s and Strange?s theoretical results, applied on the actions that took place when General Motors announced that the production in Trollhättan and Rüsselsheim would be moved to one of the two assembly plants. This case study presents evidence that states and firms do negotiate with each other and that in these new international relations, a broad view of the many actors involved must be taken. Furthermore, it is argued that states need to find new ways to organise themselves in order to become more effective and meet the demands of firms. Many of the questions asked by Sto...