lecture slides 1
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Lecture Slides By Fraz ShafiqueTRANSCRIPT
Globalization: Introduction and
Overview
What is Globalization?
Globalization: A move toward a more integrated and interdependent economy
Facets of Globalization: Markets and Production
Facets of Globalization
Globalization of Markets: the merging of historically distinct and separate national markets into one huge global marketplace
Globalization of Production: Sourcing of goods and services from locations around the globe to take advantage of national differences in the cost and quality of factors of production
Drivers of Globalization
1.Declining Trade and Investment barriers
2.Technological Change
Declining barriers
GATT WTO Trade barriers eliminated over time. This has resulted in a remarkable increase in world
trade.
Changes in Technology
Rise in the use of internet
Changing Demographics of Global Economy
4 Facts from the 1960’s that changed:
1.US dominance in World Economy2.US Dominance in World FDI3.Dominance of large US Multinational firms
4.Communist national markets off limits
Changing World Output and World Trade Picture
USA and China
Changing Foreign Direct Investment Picture
Asian FDI excluding Japan
Changing Nature of Multinational Enterprise
Multinational companies emerging from countries other than USA/Europe/Japan
Smaller firms engaging in multinational operations due to lowered costs through internet
Evolution of Commercial Institutions
Economic activity is the basis for social relationships. - - True or false? Discuss.
Past basis for societies: 1. Hunting and Gathering2. Agriculture3. Industrialization
Evolution of Commercial Institutions
3 notable institutions of Agri era:
1. Agricultural landlords/barons2. Military3. Religious class
Changing World Order
Global Economy of the 21st Century
Increasing volume of cross-border tradeAdoption of liberal economic policies
Deregulation Lowering of trade barriers Acceptance of market economy by communist and
socialist nations
Globalization Debate
Is globalization (shift toward a more integrated and interdependent economy) a good thing?
Anti-Globalization Protests
Reasons for anti-globalization protests:That wages are pushed lowerJobs ‘exported’ to other countriesDetrimental impacts on the
environmentGlobalization promotes ‘colonization’
by other means
Globalization, Jobs and Income
Does Globalization increase jobs and income or is it the reverse?
PLUS - Cheaper goods free up resources for use to purchase other goods
MINUS – Real wages, adjusted for inflation, for the average lowest-income families fell by 6% between 1980 - 2000
Globalization, Labor Policies and the Environment
Criticism of Globalization:Manufacturers move to places where they
have fewer environmental restrictions. Pollution rates increase
Misuse and abuse of labor Carpet industry workers in Pakistan
Counter is: As per capita income increases, emission levels decrease
Globalization and the world’s poor
Gap between rich and poor increasing:In 1870 average IPC in 17 richest
was 2.4 times of othersIn 1990 the same group was 4.5
times as rich as rest
Managing the Global Marketplace
Challenges faced by an international business (any firm that engages in international trade or investment).
Challenges in: Use of Currencies Cultural understanding Legal and political understanding Historical understanding