Globalization: Meaning, Characteristics, and History PDF

# Meaning of Globalization - The word "globalization" refers to the outgoing of an international network, belonging to an economic and social system. - According to Eric Beerkens: Globalization refers to all those processes by which the peoples of the world are mix into a single world society to gl...

# Meaning of Globalization - The word "globalization" refers to the outgoing of an international network, belonging to an economic and social system. - According to Eric Beerkens: Globalization refers to all those processes by which the peoples of the world are mix into a single world society to global society. - Thus globalization can refer to those local timely processes of change, which constitutes the fundamental change of human concerns in an organization, linking together and expanding human activity across regions and continents. # Characteristics of Globalization - **Global Markets:** According to Hill, globalization creates global market. Expansion of global markets expand the economic activities of exchange of goods and funds. - **Industrial Effects:** Globalization has also affected the Industrial sector of the world. Now in this era of globalization, the focus of industries is to produce foreign commodities and to facilitate the consumers in all over the World. - **Changes in World Trade Picture:** Before the phase of Globalization, United States of America was dominant in world export. After the arrival of globalization, Germany, Japan, South Korea and China have seriously challenged the position of America. - **Effect on Employment:** After the arrival of globalization, it was a sense that the job will shift to developing countries from developed and advanced countries. - **Changes in Foreign Direct Investment:** Foreign Direct Investment is considered as important indicator of economic development. According to Salvotore, investment in form of lands, capital good, inventories and factories are the real investments. Globalization increases this foreign direct investment. # History of Globalization - Leonid Grinin and Andrey Korotayev contribute to the history of globalization. They propose the time periods range from before the 4th millennium BCE to the 21st century. - A history of globalization that draws on a special methodology and a world system approach based on the development of local links over seven periods of time starting with the Agrarian Revolution. - William Thompson contributes to the history of political and economic globalization. - He argues that the way we make sense of world politics and episodes of rapid globalization depends on our historical scripts. # Globalization After World War II: - The end of World War II somehow marks a new beginning of development thinking. The belief in modernization was surprisingly quickly revived after World Wars. Moreover, development thinking reinvented itself in developing countries and the Third World. - USA and the Soviet Union filled established a bipolar world order marked by two economic systems and a worldwide competition for political influence. - USA wanted to establish a liberal world economy and gain access to raw materials and markets previously controlled by colonial powers. The Soviet Union interests were likewise ideological and geopolitical. # Globalization During 1990: - 1990s was a period of rapid globalization understood as increasing range and scope of international economic interaction and more complex international divisions of labour. - During the same period, knowledge became an increasingly important independent source of competitiveness, innovation, and growth. # Globalization After 1990: - After 1990 globalization plays some important role all over the world. That’s are- - **The Integration of European Markets:** Because of globalization European Markets became integrated after 1990. - **Changes in Investment Patterns in Europe:** Investment Patterns were changed due to globalization. - **Internationalization of trade:** India’s internalization of trade after 1990 has been very encouraging. - **Internationalization of FDI flows:** Globalization plays a vital role for Internationalization of FDI flows. # Notable Global Institutions - World Trade Organization(WTO) - International Monetary Fund (IMF) - World Bank - United Nations (UN) - General Agreement on Tariffs and Trade (GATT) - International Justice - Universal Jurisdiction - US, UN, International Law # The Emergence of Global Institutions - Post world war II, strong impetus for global institutions. - Regional economic integration moving more quickly, European Union, NAFTA etc. - Globalization has accelerated the need for institutions manage, regulate and police the global market and also promote the establishment of multinational treaties to govern the global business system. # Drivers of Globalization - **Two macro factors:** - Declining trade and investment barriers - Technological change - **International trade** occurs when a firm exports goods or services to consumers in another country. - **Foreign direct investment** (FDI) occurs when a firm invests resources in business activities outside its home country. # Drivers of Globalization A graph is shown with "Volume of Total Exports" and ‘"World GDP“ on the vertical axis, and dates from 1950-1960 through 2000-2010 on the horizontal axis. - The average annual percentage growth in the volume of exports is highest during the 1960-1970 time frame. - The average annual percentage growth in world GDP is highest during the 1990-2000 time frame. - The source for this information is “2010 WB report.” # Costs of Globalization: - Free trade can harm developing economies. - Environmental costs - Labor drain - Less cultural diversity - Tax competition and tax avoidance - Inequality - Dominant Global Brands # Benefits of Globalization: - Free trade - Free movement of labor - Increased economies of scale - Greater competition - Increased investment - Reducing monopoly profits - OECD growth project - Improved Information Technology