Global corporations play a major role in economic globalization by operating across national borders in industries like technology, manufacturing, and finance. As multinational companies, they must navigate cultural differences and regulations across countries while leveraging their worldwide presence to grow markets and profits. The rise of large corporations from emerging economies like China and India has shifted capital flows from predominantly North-North and North-South patterns to more South-South and South-North investments.

1. CONTEMPORARY WORLD
LESSON 5
DEFINITION OF TERMS:
● Market Integration – is a process by which economies are becoming more interdependent and
interconnected in terms of commodity flows
● International Financial Institutions or IFIs – are institutions that provide support through loans
or grants and technical advices to promote a country’s economic and social development
(Bhargava, 2006: 393).
● Corporations – are private institutions that produce or manufacture goods, products, and
services for a more expanded market usually at the reach of regions or the world.
Transactional Corporations (TNCs) – Have a more complex setting where each foreign
subsidiary is given some freedom to develop its own product lines and marketing compared to;
Multinational Corporations (MNCs), which have more of a home or country base taking care of
the R&D and marketing, and focus more on exporting their products and services (Iwan, 2007).
The proliferation of Call Centers and Business Processing Outsourcing (BPO) companies in the
Philippines. Most of these companies cater to international consumers based in US, Australia,
New Zealand, and Europe.
According to Philippine Statistics Authority (2018), the Philippine has 851 BPO companies, more
than half of which are call centers (429).
The Philippines is the call center capital of the world, accounting to 18 percent of the global
market share, US$24.4 B and 7.5 percent revenue increase in the first quarter of 2018 (Sea
Limited, n.d.).
These developments are due to market integration, which has two kinds Horizontal and Vertical
integration (Grossman & Hart).
Horizontal integration- happens when a firm gains control of other firms performing similar
marketing functions at the same level in the marketing sequence. For instance, Disney bought
Pixar, which is also in the entertainment media, for $7.4 billion. (La Monica, 2006).
Vertical integration- happens when one company owns the operations and products from one
stage to the other along the supply chain. For example, an iron mining company operates the
steel manufacturing firm.

2. The International Financial Institutions and their Role in the Global Economy
International Financial Institutions are institutions that provide support through loans or grants
and technical advices to promote a country’s economic and social development
Global and regional IFIs include international Monetary Fund (IMF) Multilateral
Development Banks (MDB).
The African Development Bank (ADB), The Intern-American Development Bank, and the
European Bank for Reconstruction and Development.
IFIs have a significant role in global economic development. Compared to private financing
institutions. IFIs provide financial and technical services and products not for profit but for
overall economic and social development.
IFIs provide loans, technical assistance, and policy-based lending; macroeconomic stability and
providing the necessary infrastructure and systems, sectoral reforms, and creation of safety nets
through policy-based lending.
SUMMARY OF MARKET INTEGRATION
Market integration refers to the process of bringing together different markets, either within
a country or across countries, to create a unified market. This integration allows for the free
movement of goods, services, capital, and labor between these markets, eliminating barriers
such as tariffs, quotas, and regulatory restrictions. When markets integrate, it can lead to
several benefits.
Firstly, it promotes economic efficiency by allowing resources to be allocated more
effectively and reducing transaction costs. It also encourages competition, which can lead to
lower prices and better-quality products for consumers. Market integration also facilitates
specialization and economies of scale, as businesses can access larger markets and take
advantage of increased demand. It can foster innovation and knowledge sharing, as firms
from different regions or countries collaborate and learn from each other. However, market
integration can also pose challenges.
It may lead to job displacement or income inequality, as industries that are less competitive
may struggle to compete in the integrated market. It can also create regulatory
complexities, as different regions or countries have different laws and regulations that need
to be harmonized.
In summary, market integration is the process of creating a unified market by removing
barriers and allowing for the free movement of goods, services, capital, and labor. It brings
benefits such as economic efficiency, competition, specialization, and innovation, but also
poses challenges such as job displacement and regulatory complexities.

3. A SUMMARIZED HISTORY OF THE GLOBAL ECONOMY
The global economy has a long and complex history, but I'll do my best to provide you with
a summarized version. The global economy can be traced back to ancient times when early
civilizations engaged in trade and bartering. However, it was during the Industrial
Revolution in the 18th and 19th centuries that the global economy began to take shape.
During this period, advancements in technology and manufacturing led to increased
production and trade between countries.
The rise of capitalism and the establishment of global trade networks, such as the British
Empire and colonialism, further fueled economic growth. The 20th century saw significant
economic shifts and challenges. The two World Wars disrupted global trade and led to
economic instability. The Great Depression of the 1930s had a profound impact on
economies worldwide, leading to widespread unemployment and financial crises.
After World War II, the international community sought to establish stability and promote
economic cooperation. The creation of institutions like the International Monetary Fund
(IMF) and the World Bank aimed to facilitate economic development and provide financial
assistance to countries in need. In the latter half of the 20th century, globalization emerged
as a dominant force in the global economy.
Technological advancements, particularly in communication and transportation, made it
easier for countries to connect and engage in international trade. This led to increased
interdependence between nations and the growth of multinational corporations. The late
20th century also witnessed the rise of emerging economies, such as China and India, which
experienced rapid economic growth and became major players in the global economy. In
recent years, the global economy has faced various challenges, including financial crises,
geopolitical tensions, and the ongoing impact of climate change.
The digital revolution has also brought about significant changes, with the rise of the
internet and e-commerce transforming the way businesses operate. Today, the global
economy is characterized by interconnectedness, with countries relying on each other for
resources, trade, and investment. However, it is important to note that economic disparities
between nations still exist, with some regions facing significant poverty and inequality.

4. THE GLOBAL CORPORATIONS
The modern global corporations are commonly referred to as multinational corporations and
transnational corporations. Aside from IFIs and governments, one of the major players in
globalization and the modern capitalist market is the global corporations.
With the growth of global corporations from emerging economies, the capital flows have now
started to change from the dominant North-North/ North-South to South-South and South-
North capital flows, most of the South-North coming from China and India.
The Global Corporation is a multinational company that operates in multiple countries
around the world. It has a global presence and engages in various industries such as
technology, manufacturing, and finance. The company aims to leverage its global reach to
expand its market share and increase profitability.
It often faces challenges related to cultural differences, regulatory compliance, and
international competition. To succeed in the global market, the Global Corporation focuses
on strategic partnerships, innovation, and adaptability to local market conditions.