Economic globalization

  • Created by: Buki
  • Created on: 09-05-14 23:29
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  • Economic globalization
    • History
      • Came into use in 1980s - describe changing map of world economic organisation
      • Only 10 citations in 1990. Some 4,000 citations by 2003
    • Causes
      • TNCs - dominate the world as a result of their global span. responsible for integrating economic activity between nations
      • Technological advancement rise of advanced transport and communication networks
      • Increasing integration of markets of different economies
    • Characteristics
      • Uneven trading between different blocs in the world (North-South)
      • Rise of single international system of production and exchange
      • National and local fortune no longer explained by what goes on cities, regions and nations, but how they are connected to rest of the world
    • Processes
      • Internationalizing processes
        • Extension of economic activities across national boundaries
      • Regionalizing processes
        • Forms of co-operation, integration, connectivity and convergence within a particular cross-national territorial area
      • Globalizing processes
        • The functional integration of internationally dispersed activities
      • Scope/spatial spread - spatial extension/ stretching of local and national exonomies
      • Intensity - degree of functional integration of economic activity (interdependence)
    • Definitions
      • World spread of capitalism and market driven economies
      • Intensification of transnational connections between economies
      • Spatial stretching/ extension of economic activity. Global integration and interdependence of economic activity
    • Effects
      • Technological change
        • Rapid shrinking of transport and communication times due to cost reduction in road, rail and air travel
          • Uneven linkages - not everybody linked up to transport and communication systems of equal terms. Story of North-North connections
            • Rise of new global communications world
          • Increase potential for geographical fragmentation of work
        • Rise of new global communications world
      • Network of trade
        • Big flows and exchanges in trade are between major producer and consumer blocs
          • Globalization of trade - producing and intensifying trade gap between North and South
      • Global production networks
        • Frequently owned and run by TNCs who act like global supply chain contollers
        • Depends on nature of industries and nature of regulatory system in host country
        • New International Division of Labour
          • Retainment of R&D functions in home county. Relocation of low cost functions to countries with lower labour costs
          • Increase potential for geographical fragmentation of work
        • Rise of world economy run by highly corporatized alliances. Econ. globalization producing new elite world order?
      • Rise of international regulatory bodies e.g. IMF, WTO, G8, EU, NAFTA etc.
        • Economic systems no longer confined to national boundaries


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