The increasing globalization of markets

This page is being edited by Peter Friedl EMBA09. In case of any questions/remarks contact me.

Description:

Globalization describes the process of growing integration of information, technology, capital, goods, services, and people throughout the world.

By the globalization of markets the growing interconnection and integration of markets, like financial markets, labour markets, trade markets etc. can be understood.

Globalization of Production - It has been observed that individual companies are increasingly dispersing parts of their production process to different locations around the globe to take advantage of national differences in the cost and quality of factors of production (land, labor, capital).

Globalization of Markets - It has been argued that we are moving away from an economic system in which national markets are distinct entities, isolated from each other by trade barriers and barriers of distance, time, and culture, and toward a system in which national markets are merging together into one huge global marketplace.

Causes of Global Shift - Two factors underlie the trend toward the increasing globalization of markets and of production. The first is the delcine in barriers to the free flow of goods, services, and capital. The second factor has been the dramatic changes in communication, information, and transportation technologies.

Consequences of Global Shift - First, companies need to recognize that industry boundaries do not stop at national borders. Second, the shift from national to global markets has increased the intensity of competitive rivalry in industry after industry.

Enablers:

• Importance of global organisations like WTO, OECD, IMF, World Bank
• Participation of China, India and other emerging markets in the global markets
• Number and importance of multinational companies
• Technological developement especially information technology
• Transport efficiency
• Specialisation and outsourcing
• Internationalization of education
• Access to international media

Inhibitors

• Nationalism and protectionism
• Local power lobbies and corruption
• Religious conflicts like the disparity of Muslim and Christian countries
• Trade barriers and tariffs
• Financial of economic crisis
• War and terrorism

Paradigms:

Market globalization decreasing the control on unemployment, GDP fluctuations, etc. Laws and regulations should therefore be made on a global basis.

Possible decreasing power of governments and increasing power of companies, which set a totally different political and economic arena. The rules to adhere to in this situation has yet to be created.

The globalization of markets can benefit—and has benefited—rich and poor alike. But the integration of the global economy is outpacing the development of a healthy global polity. To realize the values and rules critical to a secure and just world—and to make the full benefits of a global market available to all—will require a better global politics.

If the globalization of the market leads to continents or countries which cannot compete anymore, trade barriers (= de-globalization) might be a counter reaction.

Experts:

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Timing:

The increase of globalization of markets has allready started and will continue in the next decades.

Web Resources:

• [1] OECD Globalization statistics

• [2] Globalisation shakes the world - article at BBC News (2007)

• [3] Global Markets Require Good Global Politics — article at The Brookings Institution (2003)

• [4] The Third Wave in Globalization Theoriesnbnsp;- article by Luke Martell (2007)

• [5] Embracing the Challenge of Free Trade: Competing and Prospering in a Global Economy — speach by Federal Reserve chairman Ben Bernanke (2007)

• [6] Rethinking Globalisation - blog by Global Trade Watch

• [7] Globalization and Me - blog on views and viewpoints on globalization

• [8] Mapping Globalization — globalization project with a collection of maps