Chapter Summary Globalization
Chapter 1
Globalization: the shift towards a more integrated and interdependent world economy.
Globalization of markets: is the merging of historically distinct and separate national markets into one huge global marketplace. (markets that were isolated by trade barriers and barriers of distance, time and culture move towards a global one)
- 90% of small business firms in USA export
- In Germany, 98% of small and mid sized companies have exposure to international markets
- The most global markets currently are not markets for consumer products, but markets for industrial goods and materials that serve universal need.
Globalization of production: refers to the sourcing of good and serves from locations around the glove to take advantage of national differences in cost and quality of factors of production such as labor, management, land, capital and technological know how. By doing this companies hope to lower their overall cost struction of improve the quality Global institutions:
GATT: (General agreement on Tariffs and Trade) treaty that committed signatories to lowering barriers to the free flow of goods across national borders
WTO (World Trade Organizatin): 154 nationas are WT members. It is responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties, a well as facilitating the establishment of additional multinational agreements between WTO states.
IMF ( international Monetary Fund): institution set up to maintain order in the internatuional monetary system.
World Bank: institution set up to promote general economic development in the worlds poorer nations.
Drivers of Globalization
Macro factors:
- Decline in barriers to the free flow of goods, services, and capital that has occurred since the end of WW II.
- Technological change specifically the developments in communication, information processing, and transportation technologies
1. Declining trade and investment
Globalization: the shift towards a more integrated and interdependent world economy.
Globalization of markets: is the merging of historically distinct and separate national markets into one huge global marketplace. (markets that were isolated by trade barriers and barriers of distance, time and culture move towards a global one)
- 90% of small business firms in USA export
- In Germany, 98% of small and mid sized companies have exposure to international markets
- The most global markets currently are not markets for consumer products, but markets for industrial goods and materials that serve universal need.
Globalization of production: refers to the sourcing of good and serves from locations around the glove to take advantage of national differences in cost and quality of factors of production such as labor, management, land, capital and technological know how. By doing this companies hope to lower their overall cost struction of improve the quality Global institutions:
GATT: (General agreement on Tariffs and Trade) treaty that committed signatories to lowering barriers to the free flow of goods across national borders
WTO (World Trade Organizatin): 154 nationas are WT members. It is responsible for policing the world trading system and making sure nation-states adhere to the rules laid down in trade treaties, a well as facilitating the establishment of additional multinational agreements between WTO states.
IMF ( international Monetary Fund): institution set up to maintain order in the internatuional monetary system.
World Bank: institution set up to promote general economic development in the worlds poorer nations.
Drivers of Globalization
Macro factors:
- Decline in barriers to the free flow of goods, services, and capital that has occurred since the end of WW II.
- Technological change specifically the developments in communication, information processing, and transportation technologies
1. Declining trade and investment