Date post: | 26-Dec-2015 |
Category: |
Documents |
Upload: | morgan-waters |
View: | 225 times |
Download: | 2 times |
By Murat Ali DULUPÇU and Onur DEMİREL
Süleyman Demirel University
Defining Globalization Impacts The Debate Theories of International Trade Regulating Globalization and
Internationalization Future: Qua Vadis?
2/25
Globalization 3D Figure-geometric
-conceptual origin- Entirety-Total? Homogeneity-similiar
The origins : “Global Village” by Marshall McLuhan in 1960-main starting point “Corporate Giants” by Charles Taze Russell in 1897-the earliest “Globalization” by Ronald Robertson
Definition:“Fast and continuous inter-border flow of goods, services, capital (or money), technology, ideas, information, cultures and nations.”
Covers so many concepts
3/25
Milestones: Globalization since Neanderthal Human The Silk Road The Golden Age of Islam Pax Romana/ Pax Ottoman then towards Pax
Britannica Two significant World Wars and competition between
the United States of America (USA) and the Union of Soviet Socialist Republics (USSR)/Blocs/Perestroika-Glasnost
Stages of Globalization: Colonization, slave trade, church constructions
abroad, inventions in the high-capacity transportation, industrialization, high constructions among provinces and countries, electrical and electronic infrastructure.
4/25
5/25
StagesFirst Stage
1490 (overseas discoveries)
Second Stage1890
(West extension)
Third Stage1990
(economism)
Impulse Nautical developmentsIndustrialization and its requirements
Multi-National Companies in 1970s, Communication Reform in 1980s, Disappearance of Competitors of the West in 1990s
ProcessProfit and then military occupation
Evangelists, then explorers, then companies and finally occupation
Cultural-Ideological effect, therefore countrywide spontaneous effect
MediumTo get the God’s religion to the pagans
Burden of the white man, humane mission, racialist theories
Highest level of civilization, governance of international community, “invisible hand” of the market, globalization: for everyone’s interest
Political Structure
Empires and Colonization
Nation States Regional and Economic Integrations
Result Colonialism Imperialism GlobalizationSource: Yaman 2001. A commonly accepted division of the globalization process
World trade volume of $380 billion in 1950 has increased to $21.2 trillion in 2005.
Catalysts of the increase: Decrease in tariffs Trade agreements signed among countries and
regions Regional integrations Developments in and cheapening in
communication and transportation technologies The mass and just-in-time production The standardization of tradable goods Convergence of human needs The creation of new needs for humankind (“New
World Order”)
6/25
Multinational Companies (MNCs) ate the companies that make FDI and produce value added in more than one country and own the process.
Theories of MNCs:Location Theory (focus on resources) Internationalization Theory (Instead of
various companies only one-company-production is advantageous. Focus on technology transfer and vertical integration)
7/25
Product Life Cycle TheoryBy Vernon, 1966, Where to produce? Developed vs. developing
economies, focus on standardization and production cost Internalization Theory
By Buckley and Casson, 1976, How to produce? By licensing or leasing vs. FDI, focus on transportation costs, trade barriers, foreign market information, information asymmetries
OLI (Eclectic) ParadigmOwnership (Focus on patent, trade secrets, trademarks,
economies of scale and synergy, diffusion of geographical risk, cross-country arbitrage)
Location (Production efficiency, transportation cost, chep labor, proximity to customers, local image, trade applications)
Internalization (Imperfect competition) Other Theories
Caves Economies (Focus on firm advantages) Oligopolistic Reaction Theory (By Knickerbocker, Follow-the-
leader) Hymer and Kindleberger’s Theory (Focus on intermediate good
transfers of MNCs)
8/25
Transportation costs 50% Airline transportation 80% Transatlantic Phone Calls 99%
9/25
One day Traffic in 2003:
Total cellular phones1984
Total e-mails1992
Total SMSs1998
Total air travel1975
Total international telephone calls1971
Source: World Bank and Istanbul Technical University
COST REDUCTIO
NS
Debate on the future of nation-states Structures such as European Union
10/25
R&D as a % of GDP increases Severe relationship among R&D, invention
and transformation of technology 1700 - 1900 1900 - 2000 2000 - …Economics Agriculture Manufacture InformationTechnology Plow Machine ComputerOutput Food Good InformationResource Land Capital KnowledgeUnit Family Company NetworkEnergy Muscle Fossil Fuels BrainCompetition Local National GlobalEducation: *Demand *Focus
Primitive Minimal "What?"
Procedures Remarkable
"How?"
Thought Continuity
"Why?"
Cultural Integration McDonaldizationvs.
Effect of Local Cultures Impossibility of a single global culture
11/25
Creation of goods and services that are customized to supply global markets but consistent with local values (Hamburgers with local spices, meat, so on)
Globalization of the local and localization of the global simultaneously
Information Technologies and Technology Flows Scientific invention and innovation Diffusion of pre-existing technologies Benefiting new technologies
Labor Hyper-Mobility and Global Distribution of Labor
12/25
# of Immigrants (Million People)The Ratio of Immigrants to the Population of the
Region
Europe 64.1 8.8
Asia 53.3 1.4
North America 44.5 13.5
Africa 17.1 1.9
Latin America 6.7 1.2
Oceania 5.0 15.2
Source: [Available at http://www.iom.int/jahia/Jahia/pid/255], (Accessed 10.02.2008).
Economic Issues Income, Income Distribution and Poverty:
Huge income distribution inequality among people and countries
Different income growth rates Deterioration in the world income distribution Reduction in absolute poverty
Capital, Finance, FDI and MNCs:
13/25
Source: UNCTAD, 2007, p. 3.
FDI INFLOWS
Production and Competitiveness:
Globalization of Knowledge: Environmental Issues
International effects of environmental problems, Limited natural resources, Lack of global management of environment
14/25
Rank of Country2005 2006 2007-
2008Germany 6 8 5
Czech Republic 29 29 33
Lithuania 34 40 38
Turkey 71 59 53
Singapore 5 5 7
Korea 19 24 11
China 48 54 34
GLOBAL COMPETITIVENESS INDICES
Source: WEF, 2007 and 2006.
Social IssuesHuge differences in;
Level of education, infrastructure, gender discrimination, life expectancy at birth, infant mortality, health expenditure per capita
Advocates of Globalization: Neo-Liberal ViewWorld Economic Forum
Established in Sweden, 1971. Members 1000 largest firms & 200 relatively
small firms from developing countries Its motto “Entrepreneurship in the global public
interest”The Washington Consensus
Initiated by John Williamson in 1989 Has 10 special economic policy recommendations
for the countries that experience economic crises. These recommendations are taught to be “standart”
reform package and criticized.
15/25
16/25
Opponents of Globalization: Anti-Globalist Movement World Social Forum
Members Open to everyone Its motto “Another world is possible”
International Forum on Globalization Established in 1994 Criticizes the lack of “free trade” and “neo-liberalism”
criticism. People’s Global Action
Established in 1998, Geneva Anti-capitalist
CorpWatch Established in 1996 and took this name in 2001 Drew attention with the analyses of poor working conditions
Friends of the Earth Established in 1971 Deals with environmental issues
Smith and Ricardo: Classical View Adam Smith, 1776 and David Ricardo, 1817 Very restrictive assumptions First “win-lose” then “win-win” Absolute advantage then comparative advantage
Neo-Classical Theories of Trade Opportunity-cost instead of labor theory of value Transformation curves, demand conditions Heckscher-Ohlin Theory (Factor Endowment
Theory) Factor Price Equalization Income Distribution Rybczynski Theory
17/25
18/25
Alternatives Skilled-Labor Theory
Focus on the differences in skilled-labor among countries Technology-Gap Theory
By Posner in 1961 Initial version of Product Life Cycle Theory
Product life Cycle Theory Preference Similarity Theory
By Linder in 1961 Focus on the similarity of tastes and preferences-demand
Theory of Economies of Scale Monopolistic Competition Theory
Focus on differentiated products New Trade Theories
Internalizes the concepts of scale, network, innovation and global competition
International Monetary Fund – IMF Established in 1944 Has 185 member states Promotes international monetary cooperation, exchange
stability and orderly exchange arrangements; fosters economic growth and high level of employment; provides temporary financial assistance to countries to help balance of payments adjustment
Control and regulation process involves Surveillance Financial Assistance Technical Assistance
World Bank – WB Established in 1944 Has 185 member states Worldwide poverty alleviation Made up of 2 unique development institutions
International Bank for Reconstruction and Development (IBRD) International Development Association (IDA)
19/25
20/25
Organization for Economic Co-Operation and Development – OECD Formed as OEEC in 1947 Named as OECD in 1961 Has 30 member states
World Trade Organization – WTO Has 151 members GATT is the principle rule book for trade in
goods Promotes freer trade
United Nations – UN Roots go back to 1865, International
Telecommunication Union Has 192 member states. Deals with the problems challenging humanity
European Union – EU Established in 1951 as the European Coal and Steel
Community by six founding members Today has 27 member countries Acts in a wide range of policy areas – economic, social,
regulatory and financial Asia-Pasific Economic Co-Operation – APEC
Established in 1989 Has 21 members Works in 3 broad areas to meet the Bogor Goals:
Trade and investment liberalization Business facilitation Economic and technical cooperation
North Atlantic Free Trade Agreement – NAFTA Came into effect on Januart 1st, 1994 Members are Canada, Mexico and the USA Freer trade and the protection of intellectual property
rights
21/25
22/25
European Free Trade Agreement – EFTA Established in 1960 Updated in 2001 EEA has 27 EU members and entered into
force in 1994 ASEAN Free Trade Agreement – AFTA
Established in 1967 in Bangkok Has 5 members
Central European Free Trade Agreement – CEFTA Signed in 1992 and entered into force in
1994 Has 8 members
Both capitalism and communism lack absolute success!
But globalization is not a magic cure for the problems of humanity either!
World still has growth potential, mainly due to developing countries
The growth in developing countries depletes natural resources and therefore future growth potential
The high growth rates in developing countries decreases poverty
However, imbalances still prevail! Divergences in incomes produce
polarization and therefore threat! 23/25
Polarization causes migration to be the only salvation in developing countries
Will the world continue to rotate from west to east or will it reverse?
The future of globalization and the world depends on the process itself and how it is managed.
24/25
25/25