Podcast
Questions and Answers
Foreign direct investment involves a company establishing a business in another country while managing that business.
Foreign direct investment involves a company establishing a business in another country while managing that business.
True
Economic globalization refers to the expanding independence of world economies.
Economic globalization refers to the expanding independence of world economies.
False
The Silk Road was primarily focused on the trade of technological innovations.
The Silk Road was primarily focused on the trade of technological innovations.
False
The International Monetary Fund defines economic globalization as a process resulting from human innovation and technological progress.
The International Monetary Fund defines economic globalization as a process resulting from human innovation and technological progress.
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Economic globalization only affects trade and not cultural or political aspects.
Economic globalization only affects trade and not cultural or political aspects.
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The World Trade Organization was established in 1995 to facilitate smoother trade among countries.
The World Trade Organization was established in 1995 to facilitate smoother trade among countries.
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China is primarily known as a major importer of manufactured goods.
China is primarily known as a major importer of manufactured goods.
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Business process outsourcing (BPO) companies have significantly increased in the Philippines.
Business process outsourcing (BPO) companies have significantly increased in the Philippines.
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Economic globalization only affects the production aspect of economies.
Economic globalization only affects the production aspect of economies.
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The Coca Cola Company manufactures and sells beverages directly to consumers worldwide.
The Coca Cola Company manufactures and sells beverages directly to consumers worldwide.
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Study Notes
Economic Globalization: Definition and Dimensions
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Economic globalization: expanding interdependence of world economies, driven by increased cross-border trade (commodities and services), international capital flows, and rapid technological spread. Examples include the Philippines' trade partnerships (China, US, Australia) and foreign direct investments (e.g., Toyota Motor Philippines).
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IMF (2008) defines it as a historical process resulting from human innovation and technological progress, increasing integration of economies via movement of goods and capital across borders.
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Historical roots: economic movement along the Silk Road, leading to connections between East and West (including the Philippines' discovery during spice trade). Contemporary examples include foreign expatriates managing subsidiaries and Filipino skilled workers abroad.
Dimensions of Economic Interconnectedness (Benczes, 2014)
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Globalization of trade and goods/services: exemplified by the World Trade Organization (WTO, established 1995) facilitating smoother trade, and China's role as a major exporter impacting global markets. Business Process Outsourcing (BPO) in the Philippines is another example.
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Globalization of financial and capital markets: evidenced by cross-listing of shares on foreign stock exchanges, cross-hedging, portfolio diversification, and round-the-clock global trading (National Research Council, 1995).
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Globalization of technology and communication: instant transactions and interactions enabled by the internet and communication technologies.
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Globalization of production: illustrated by multinational corporations (MNCs) and transnational corporations (TNCs), such as the Coca-Cola Company (manufacturing concentrates and distributing to bottlers worldwide).
Defining Economic Globalization
- Szentes (2003) defines it as creating an "organic system" by expanding transnational economic processes and relations to more countries, deepening economic interdependencies. This suggests a shift from national control to a global context.
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Description
Explore the intricate layers of economic globalization, focusing on its historical development, driving forces, and real-world examples, such as trade partnerships in the Philippines. Understand the interconnectedness of economies through technological innovation and cross-border capital movements.
