Global Firms and Social Norms

Occasionally, the scientific discussion about globalization underlines the risk of a « race to the bottom » in the most industrialized countries. Our paper aims at clarifying this discussion by basing its analysis on the globalization strategies of companies. Three lessons can be drawn from our analysis. Companies have an a priori choice between three models of globalization (commercial, multinational, purely global). The present form in our world economy clearly favours the purely global choice : the only one that produces directly an effect of « race to the bottom » in the most industrialized countries. The phenomenon of « race to the bottom » produced by the global model is amplified by the incentive of « corporate governance » that increases even more wage differences and social cleavages in these countries. – Summary AFRI-2004