The fact there are winners and losers, and societies vary in how much they compensate the losers Continuing poverty: ¼ world’s population below $1 a day; around ½ below $2 a day (has declined since article, mainly because of China and SE Asia and to some degree India) Gap between rich and poor countries has widened. And inequality within most countries has risen with globalization. Environmental concerns and conflict over global governance Open borders and their effects (money laundering, terrorism, disease, drugs, sex trafficking)
Discuss distinction between empirical and normative debates. Leaving out #3, because it is explicitly normative, which leaves five.
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GLOBALIZATION BY DHARMIN .V. KORADIA
Video: Emerging Powers: India • What did you find informative about this film? • What is the basic argument that the film presents about India and about globalization? • How does the film interpret such things as India’s widespread poverty and its periodic flare-ups of ethnic and religious strife? • Why are India and China so important?
“Globalization in its current phase has been described as an unprecedented compression of time and space reflected in the tremendous intensification of social, political, economic, and cultural interconnections and interdependencies on a global scale.” Stegler, p. ix• time-space compression• deterritorialization and supraterritoriality
One way to approach this: think about the world before globalization• Distance mattered—space often measured intime• Territorial boundaries more or less keptthings in and out• Society and culture had spatial referents• Everything had its “place” (literally)
In a world of deterritorialization and supraterritoriality:•Distance becomes almost irrelevant (the end ofdistance)•Boundaries are increasingly permeable.•Groups and cultures increasingly don’t have aterritorial basis•A new kind of non-physical “place” is emerging
Bosworth and Gordon: A survey of some key processes of globalization• Technological advances• Expansion of international commerce (exportsand imports)• Rising importance of private capital flows(stock markets and multinational corporations)• Increasing travel and migration (internationaltourism and domestic diversity)• Increased communication and interactionbetween peoples (through all sorts of media)
Bosworth and Gordon also point to some of thekey public controversies over globalization: What are they? “Can globalization be harnessed so that all citizens and countries benefit and not just the lucky few?”
Frank Lechner: Empirical Debates2. Process vs. Project3. New Era vs. Nothing New (Globabaloney)4. Hard vs. Soft4. End vs. Revival of Nation State5. Cultural Sameness vs. Difference
Amartya Sen: How to Judge Globalization (Normatively)1. 1. Is globalization Westernization? Is it a threat to non-western societies?2. What is the right question to ask about globalization and the poor?3. What are the “legitimate” questions that “anti- globalization” protestors ask?
“Our global civilization is a worldheritage... The idea of an immaculateWestern conception is an imaginativefantasy.”“Globalization has much to offer, but evenas we defend it, we must also, without anycontradiction, see the legitimacy of manyquestions that the antiglobalizationprotestors ask.”“The world powers bear an awesomeresponsibility for helping in thesubversion of democracy in Africa and ofrall the far-reaching negativeconsequences of that subversion.”
“Over the past decade globalization hasbeen driven by technologicaladvances…..But globalization has alsobeen driven by policies and ideas…” Bosworth & GordonNext time: globalization as a neoliberalproject
Performance of acquisitions We used an event study methodology ► Sample - Indian companies had cross- border acquisitions during 2002-2006. ►224 transactions: 127 different companies from 33 industries. ► We used BSE-500 (represents nearly 93% of the total market capitalization on Bombay Stock Exchange Limited) as the market index for the calculations. Calculating CAR ►Used the following formula to calculate the abnormal returns - ^ ^ ARit = Rit - α i - β i Rmt, (t = -7 to t= +7) ►The CAR was calculated using the following formula - t = +7 CARi = ∑ ARit t = -7Copyright NUS Business School 2008
Summary Acquisitions a prominent part of OFDI from India ► Good distribution across industries and regions ► Achieving an increased prominence, strong growth ► Important component to OFDI and strategy of MNCS from India Strategy and performance ► Performance strong on an absolute and a comparative basis ► Several market expansion motives related to good performance ► Market clearly rewarding international expansion strategy of Indian firms ► Need comparative analysis to other modes ► Need deeper analysis of strategy and performance of acquisitionsCopyright NUS Business School 2008