Voluntary export restraint VER without market restraints

• Published in: European business review Vol. 17; no. 3; pp. 217 - 231
• Main Authors: Seidenfuss, KaiUwe, Kathawala, Yunus
• Format: Journal Article
• Language: English
• Published: Emerald Group Publishing Limited 01.06.2005
• Subjects: Automotive industry; European Union; Exports; Imports; Japan; Negotiating
• ISSN: 0955-534X
• DOI: 10.1108/09555340510596634

Purpose The paper aims to research the mechanics of voluntary export restraints VERs. It first develops a comprehensive VER research agenda, subsequently covering a 1991 VER between the European Union EU and Japan that established voluntary quotas on Japanese cars until 1999. Designmethodologyapproach Reflecting gaps in research, an overall VER research agenda is set up. Then, referring to the only source providing ex ante hypotheses on the specific EUJapan VER, those hypotheses by Preusse are checked against available ex post data at the time of writing in 2002. Findings First, Japan has not exhausted any of its yearly quotas during and even accepted a cut of quota in some years an outcome only partly influenced by lower than expected market growth in the relevant period. Then, the competitive power of the Japanese producers appears overestimated, while the European capability to catch up was underestimated. Potential escape routes such as transplants and thirdcountry imports fell short of estimations providing no particular support for Preusse's efficiency effect hypothesis and competitive effect hypothesis. Research limitationsimplications Typical research limitations such as data source availability and actor accessibility notwithstanding, it is shown that the product upgrading effect often associated with VERs may happen independently of such agreements. Originalityvalue This first resultsbased, hypothesisdriven exploration of particular VER mechanisms supports the authors call for a dual, actordriven and multidisciplinary VER research approach. It holds promise for the potential avenues for related research.