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8/9/2019 The Global Economy and Globalization
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The Global Economy andGlobalization Processes
Dr Kawal Gill
Associate ProfessorDepartment of Commerce
SGGSCC
Pitam Pura
University of Delhi
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What is Globalization?Processes by which movements ofproducts, people, companies, money andinformation grow in quantity and indeepening ties across national borders
Interconnectedness is evident particularlyin finance and high-tech dimensions
Despite economic integration includinggrowing trade, national markets persist inpresenting differing cultural environmentswhich businesses must take into account
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Internationalization vs.
GlobalizationInternationalization processes: extensions ofeconomic activities across national borders;
growing quantitatively.Globalization processes: both geographicalextension as in internationalization and thequalitatively different functional integration of
internationally dispersed activities.
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Different Facets of Globalisation
Globalisation of Markets: refers to managing ofhistorically distinct and separate national markets into ahuge global market.
Globalisation of Production: refers to the sourcing ofgoods and services across the globe to take advantageof national differences in the cost and quality of factors
of production.
Emergence of Global institutions: IMF and World Bankin 1944, United Nations in 1945 and WTO in 1995.
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GLOBALIZATION VIEWPOINTS
Hyperglobalists Transformationalists
Globalization Viewpoints
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Hyper globalists
An extreme view that believes in:
the emergence of a globalcosmopolitan corporate culture
the decline of nation states
the increasing power of TNCs
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Transformationalists
View globalization as a complex, uneven
process
A multidimensional view: includes
economic processes alongside regionaland cultural issues
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Elements of Globalization
Eonomi globali!ation
"#lt#ral globali!ationPolitial globali!ation
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Globalization of the business corporation
Globalization of supply
Globalization of demand
Economic Globalization
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Cultural Globalization
A process of cultural homogeneity of the
global economy. Cultural globalization is
characterized by:
Culturalhomogenization: uniformity andsimilarity in global products and processes
Culturalheterogeneity: local differences
Culturalhybridization: adaptation of the globalto local conditions, meaning reattribution and
re-contextualization
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Political Globalization
The emergence and domination of global
and regional institutions and trans-
governmental networks such as:IMF
The World Bank
WTO
UNCTAD
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Drivers of Globalization
Inreasingompetition
Globalgo$ernane
Te%nologial&e$elopments
Eonomifores
Politialfores
'(IVE(S
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The Role of technological change
Microprocessor and Telecommunication
The Internet and the World Wide Web
Transportation Technology
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The Changing Demographics of Global
EconomyThe changing world output and world
trade picture
The changing FDI picture
The changing nature of Multinational
EnterpriseThe Changing World Order
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The pros and cons of globalization
Pros Promotes economic growththrough FDI
Increases overall well-being
Offers consumer choice
Price competition benefitsconsumers
Fosters technologicalinnovation
FDI provides employmentand skills training
Cons
FDI mainly benefits theinvesting company and itsshareholders rather thanthe host society
Environmental degradationin host countries
Leads to global inequalitiesbetween and within nations
TNCs become morepowerful than governments
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Hidden Face of Globalization Part I
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Hidden Face of Globalization Part II
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Negative Effects of Globalization
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Thanks
Any Questions?