bf90a3.1globalisation of world economy and business

7/28/2019 Bf90a3.1globalisation of World Economy and Business

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Amity School of Business

Module- 2

New international

economic order

RaVI bHASIN

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Truest definition of GlobalizationAnswer : An English princess with an Egyptian

boyfriend crashes in a French tunnel, driving

a German car with a Dutch engine, driven by

a Belgian who was drunk on Scottish whisky,

followed closely by Italian Paparazzi, on

Japanese motorcycles; treated by an

American doctor, using Brazilian medicines.You probably reading this on an IBM Clone

that uses Taiwanese chips, and a Korean

monitor

..

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What is Globalization Globalization is the process of international

integration of products, technologies, human

resources, capital, information and cultures. It is

characterized by increasing social and economicopenness and growing interdependence

between the countries of the world. As

globalization progresses, economic, social and

political systems of different countries morefreely interact with one another and adapt to

promote further interaction.

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Levels of Globalization World level globalization

Country level globalization

Industry level globalization

Firm level globalization

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World level globalizationMain Indicators-

Share of world trade in world GDP

Stock of FDI in world as a proportion ofGDP

Global transaction in foreign exchange as

a proportion of world GDP Total BoP receipts of all the countries of

the world as a proportion of world GDP

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Country level GlobalizationMain Indicators-

Share of foreign trade in national income.

Foreign investment as a proportion tonational income.

Transactions in foreign exchange as a

proportion to total transactions. International investment income flow.

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Amity School of BusinessCOUNTRY LEVEL-CONTI.

Emigrant and immigrant population.

International tourism traffic.

Share of foreign remittances in nationalincome.

Sensitivity to changes in economic and

social conditions in other regions of theworld.

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Industry level globalizationMain indicators-

Industry exports and imports as a

proportion of total industry output.

Foreign investment in the industry.

Total foreign exchange transactions

conducted by the firms of industry. Outsourcing.

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Firm level globalization

Foreign collaborations.

Access to foreign markets.

Foreign portfolio investment.

Foreign joint venturing.

Foreign contract manufacturing.

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Characteristics of globalization Rapid growth in international financial

actions

Fast growth in trade The emergence of global markets

The diffusion of technologies, ideas and

communication system

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Advantages of Globalization

Competitive and learning effects

Technological gains

Larger markets Outsourcing and sub-contracting advantages

Greater specialization

Price stabilization International investment inflow

International economic cooperation.11


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Disadvantages of globalization Spread of economic evils

Jobless growth

Loss of economic sovereignty External technological dependence

Drain of basic raw materials

Problem of shift from national priorities High burden of dividend outflow.

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Major Steps Towards Globalization

in India Devaluation of rupee

Market determined exchange rate

Import liberalization

Opening up to foreign capital

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Globalization- impact on

Indian economy Capital-oriented Globalization

Worsening Distribution

Jobless Growth

McDonaldization

Globalization and Capitalism

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bf90a3.1globalisation of world economy and business

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