The increasing globalization of markets

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

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Description:

Globalization is the growing interconnectiveness reflected in the expanded flows of information, technology, capital, goods, services, and people throughout the world. Therefore the globalization of markets is the growing interconnectiveness of markets, like financial markets, labour markets, trade markets etc.

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:

  • Increase in technology especially information technology
  • Increasing participation of China and India in the global markets
  • Decreasing power of communism
  • Increasing power and number of global companies.
  • Decreasing Psychic (or cultural) Distance
  • Increasing Power of community ex)WTO, OECD, IMF
  • Increasing power of multinationals

Inhibitors

  • The increase of ethnical nationalism
  • The increase of terrorism and the disparison of Muslim and Christian countries
  • The increase of trade barriers
  • The European Union falling apart

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:

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