How Are International Corporate Interrelations Affected By Extreme Political Changes?: A Statistical Analysis Of The Influence Of Governmental Shifts To Protectionism On The Interrelation Between The U.S. And German Automobile Industry

Abstract

This paper examines the influences of protectionist measures on international interrelation. The industry chosen for the research is the automobile industry within Germany and the USA. First of all, the paper gives an overview of current research regarding the influence of protectionism on trade and furthermore introduces the field of the automobile industry and protectionism itself. Consequently, exploratory research is carried out. Therefore, two data sets, stock prices and foreign direct investments, are used to perform different analyses with the programming language R. Methods used are Time Series Analysis, Network Analysis and multivariate analysis. In summary, the results show that an influence of rising protectionism on international interrelations can be proven. It is important to state that international interrelations within the German and American automobile industry are rather changed than diminished. It is noticeable that small long-term partnerships and relations migrate into bigger constantly changing networks of companies interrelated. Moreover, especially Time Series Analysis showed that in the long-term protectionism will not diminish international interrelation and investments among the countries will grow. Still, an overall fear of stronger protectionism is another important finding of the research. For the future a stronger reaction of companies regarding their internationalization strategy is more than likely.