In the early months of 1957, as government officials from six Western European countries met in the Italian capital to sign the Treaty of Rome and establish the European Economic Community (EEC), businesses of all sizes, sectors, and national origins operating in Europe began to analyze what an integrated regional economy might mean for their interests. Would the large common market promised in Rome offer the benefits of more consumers and greater bargaining power, or would it mean a loss of state protections and increased intraregional competition? Would it help companies headquartered in the EEC rise to the growing “American challenge?”Footnote ¹ How would collective industrial, commercial, and competition policies affect European enterprise? And how should firms respond?

Business responses to the later renamed European Community (EC) initially varied widely. While some transnational associations like BusinessEurope enthusiastically established offices around the new apparatus of economic coordination in Brussels, other firms approached the EC more skeptically, even as they made efforts to position themselves in the new European economic and political milieu.Footnote ² Perhaps most critical was the Union of Industrial and Employers’ Confederations (UNICE), created in 1958 expressly to monitor and resist the expansion of “integrationist” policies in Brussels.Footnote ³ Answers to questions about the broad impact of integration on business were initially obscured by the nascency and slow progress of the EC in the 1960s. But amid the economic and political crises of the 1970s, and in the face of increasing global competition from America and Asia, many big businesses based in Europe embraced the views of Philips CEO Wisse Dekker: “There is really no choice. . . . The only option left for the [European] Community is to achieve the goals laid down in the Treaty of Rome. Only in this way can industry compete globally, by the exploiting of economies of scale for what will then be the biggest home market in the world.”Footnote ⁴ Over the course of the 1980s and 1990s, Dekker and many of his fellow corporate CEOs in the region not only championed the cause of integration through peak associations like the European Roundtable of IndustrialistsFootnote ⁵ but also altered their firms’ business strategies to reflect the changing environment of an integrating region in a globalizing world.

“Agents of Integration” examines the ways big European businesses responded to and participated in the process of regional economic integration, from the crises of the 1970s through the development of the European Union (EU) in the 1990s. It finds that when faced with global competition, large companies based in the EC and EU developed regional business strategies, orienting their operations, supply and value chains, production, and distribution around their “home” region of Europe. Some of these firms relocated extra-regional investments back to Europe, while others became multinational corporations (MNCs) in the process of expanding into proximate markets through greenfield investments, new acquisitions, and the “merger mania” that swept through Europe in the late twentieth century, as it had first in the United States nearly a century before.Footnote ⁶ Many of these MNCs incorporated small- and medium-sized enterprises (SMEs) across the region into their value chains as they grew, both acquiring local firms and subcontracting to them as well. Through their regionalization, European MNCs acted much like Adam Smith’s butcher, brewer, and baker: as agents of integration, while engaged in the private pursuit of profit.Footnote ⁷

By deploying multidisciplinary methods and bringing a variety of literatures into conversation, “Agents of Integration” contributes new dimensions to the understanding of the history of integration. Scholarship on the European Union has overwhelmingly focused on the power of nation-states and their ‘grand bargains’ in reshaping the European landscape.Footnote ⁸ The much smaller body of work examining the role of nonstate actors in the integration process has predominantly concentrated on organized interest groups and the lobbying activities of corporations in Brussels.Footnote ⁹ But business, particularly big businesses like MNCs, wielded even more power outside the boardrooms of the European Commission’s headquarters at Berlaymont. In fact, their size, scale, and scope positioned MNCs to shape European markets and global capitalism alike, and to play a significant role in the development of a regional economy in Europe—simply by means of the economic geography of their operations.Footnote ¹⁰

Building on the foundation laid by studies of business responses to integration in particular national environments,Footnote ¹¹ by individual firms,Footnote ¹² within the context of globalization,Footnote ¹³ and on broad analyses of the effects of international business on economic integration,Footnote ¹⁴ this dissertation brings business historical methods to bear on the history of the European Union and its single market. It draws evidence from corporate and institution archives in seven countries and three languages, as well as interviews with corporate executives and regional policymakers in key positions during the turmoil of the 1970s, relaunch of the 1980s, and unification of the 1990s. Comparative case studies of firms headquartered in different member states and from different economic sectors offer granular detail of how the diverse experiences of globalization by manufacturers, banks, and retailers similarly motivated the strategy of regionalization and how that strategy shift, in turn, reinforced the geography of regional economic integration.Footnote ¹⁵

This dissertation’s structure flows from its methodological approach. It begins by reframing the integration project in the context of global competition, which weakened the primacy of nation-states, demanded collective efforts to manage globalization,Footnote ¹⁶ and precipitated a shift in the geographies of both regional political economy and European business.Footnote ¹⁷ Bringing sociological theories of regionalism together with firm-level data, Chapter 1 examines the regionalization of European business in the wake of increasing global competition. It distinguishes between the perceived and real threats European firms faced from rivals in the United States and Japan, and frames firm responses to those challenges in global terms, thereby situating  regional economic integration in a wider perspective and setting the stage to analyze the strategies of particular companies.

The pressures of globalization motivated business to regionalize in two ways. While the case studies included in “Agents of Integration” focus on the regionalization of business strategy, it begins by humanizing the relationship between big business and Brussels. Using newly opened archival sources, Chapter 2 explores the nexus of business and politics in Europe by constructing a prosopography of the new economic elite that formed in Brussels as business leaders increasingly interacted with policymakers on the European Commission. While these networks operated in various ways, ranging from informal connections to institutionalized associations, they served to conjoin and amplify the power of the participating elites around shared objectives. Importantly, this chapter also investigates the revolving door that developed between corporate and political elites in Brussels and examines the accountability mechanisms in place in such a system.

Perhaps nowhere did the interests of European industrialists and regional policymakers converge more distinctly than in the area of manufacturing. European producers, already under pressure from the postwar growth rate plateau and the crises and recessions of the 1970s, were increasingly relegated to the margins of global and domestic markets. Through the cases of two very different automakers in the Committee of Common Market Automobile Constructors, Chapter 3 moves beyond studies of corporate political influence and examines the ways European manufacturers developed regional production and distribution networks when faced with the challenge of global competition. It then maps the regionalization of European auto manufacturing onto the geography of intergovernmental agreements, analyzing how firms were both anticipating and reinforcing integration. Ultimately, this chapter asserts that by drafting and implementing common regulatory standards, investing regionally, establishing subsidiary and value chain networks including thousands of SMEs, and developing a European sales strategy, these automakers contributed to the making of the single common market for cars in the region.

Similarly, Europe-based multinational banks took a regional approach to the challenges they faced in the later decades of the twentieth century. The wave of globalization in the late nineteenth and early twentieth centuries saw European banks engaged in far-flung ventures across Asia, the Middle East, and Africa, where foreign investments offered some security against the conflict of two world wars fought on European soil and the intervening depression. But, as Chapter 4 explains, the postwar rise of American finance, widespread instability in the developing economies of former colonies, and the promise of new opportunities in Europe motivated European investment banks to reconstitute their portfolios in favor of assets closer to home, including in the proximate growth markets  of Mediterranean, Central, and Eastern Europe. In addition to their membership in pro-integration associations such as the European League for Economic Cooperation and the Association for the Monetary Union of Europe,  these banks financed large-scale industrial and transportation projects across the region through systems of branches, subsidiaries, and partnerships. Because of their connections to the real economy, the banks investing in Europe facilitated not only the consolidation of commercial finance but also the interconnectedness of European capital.

Chapter 5 considers two contrasting approaches to retail expansion across Europe in the 1970s, 1980s, and 1990s. From their headquarters in Western Europe, both companies seized opportunities to grow into nearby markets, especially in Central and Eastern Europe after the collapse of the Soviet Union. One firm took a centralized, high-volume approach and invested in transcontinental shipping to distribute one set of SKUs across its vast network of locations. The other maintained its family management and sourced local products in each new subsidiary market. Such contrasts provide an important opportunity to consider how MNCs shaped the tastes of European consumers as much as they did the integration of European markets.

Together, these chapters provide a cross-cutting analysis of the ways multinational corporations, from different national contexts and with very different sectoral concerns, similarly played an active role in realizing the goals of a common market through the pursuit of their own self-interest. But these findings also raise several important questions about the implications of market integration driven by big business. How did the shape of the new regional market affect small- and medium-sized enterprises, companies based outside of the Western European core, and consumers? Was coordinated economic regulation an even match for regional MNCs? By considering the paradoxes inherent in the role of corporations as agents of integration, this dissertation also attends to the darker side of Smith’s “invisible hand” in the making of the EU’s single common market.