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1. UNIT II
UNIT II
THE STRUCTURES OF
THE STRUCTURES OF
GLOBALIZATION
GLOBALIZATION

2. Learning Objectives:
Learning Objectives:


•define economic globalization
•define economic globalization
 •explain the two major driving forces of global
 •explain the two major driving forces of global
economy
economy
•
•differentiate economic globalization from
differentiate economic globalization from
internationalization
internationalization
 •trace the origin of economic globalization
 •trace the origin of economic globalization

3. THE GLOBAL
THE GLOBAL
ECONOMY
ECONOMY
Economic globalization refers to the increasing interdependence of world
economies as a result of the growing scale of cross-border trade of commodities and
services, flow of international capital and wide and rapid spread of technologies. It
reflects the continuing expansion and mutual integration of market frontiers, and is an
irreversible trend for the economic development in the whole world at the turn of the
millennium (17).
According to the International Monetary Fund
economic globalization is a
historical process, the result of human innovation and technological progress. It refers to he
increasing integration of economies around the world, particularly through the

4. movement of goods, services, and capital across borders. It
also refers to the
movement of people (labor) and knowledge (technology)
across international borders.
in economic terms, globalization is nothing but a process
making the world
economy an organic system by extending transnational
economic processes and
economic relations to more and more countries and by
deepening the economic
interdependencies among them (19).

5. Two Major Driving Forces for
Two Major Driving Forces for
Economic Globalization
Economic Globalization
1. The rapid growing of information in all types of productive activities
1. The rapid growing of information in all types of productive activities
2. Marketization (A restructuring process that enables state enterprises to
2. Marketization (A restructuring process that enables state enterprises to
operate as market-oriented firms by changing the legal environment in which
operate as market-oriented firms by changing the legal environment in which
they operate
they operate
(20) and can be achieved through reduction of state subsidies,
(20) and can be achieved through reduction of state subsidies,
organizational restructuring of management such as corporatization,
organizational restructuring of management such as corporatization,
decentralization, and privatization
decentralization, and privatization
(21).
(21).

6. Rapid development of science and technologies served
as basis for immediate
globalization of the world economies which in turn
provided an environment where there
is a swift spreading of market economic system all over
the world. It is also developed
based on the increasing cross-border division of labor
which penetrates within the
enterprises of different countries on the level of
production chains.

7. Dimensions of Economic
Dimensions of Economic
Globalization
Globalization
1. The globalization of trade of goods and
1. The globalization of trade of goods and
services
services
2. The globalization of financial and capital
2. The globalization of financial and capital
markets
markets
3. The globalization of technology and
3. The globalization of technology and
communication
communication
4. The globalization of production
4. The globalization of production

8. Economic globalization is a functional integration between internationally
dispersed activities which means that it is a qualitative transformation rather than a
quantitative change while internationalization is an extension of economic activities
between internationally dispersed activities.
Economic globalization produces its own major players in the form of
transnational corporations (TNCs), the main driving forces of economic globalization of
the last 100 years or roughly two-thirds of world export. Transnational corporation
otherwise known as multi -national corporation is a corporation that has a home base,
but is registered, operates and has assets or other facilities in at least one other
country
at one time. Examples are the US-based General Electric (GE), the Coca-Cola
Company of Atlanta, Georgia, US Nike and others
Difference between Economic
Difference between Economic
Globalization from Internationalization
Globalization from Internationalization

9. Origin of Economic
Origin of Economic
Globalization
Globalization
Economic globalization is a process that creates an organic system of the world
economy.
In the 16th century world system analysts identify the origin of modernity and
globalization through long distance trade in the 16
th century. This best known
example of archaic globalization is the Silk Road, which started in western China,
reached the boundaries of the Parthian empire, and continued onwards towards Rome.
It also connected Asia, Africa, and Europe.
In the 17thand 18th century global economy exists only in trade and exchange
rather than production as the world export to World GDP did not reached 1 to 2 percent.

10. In the 19th century the advent of globalization approaching its modern form is
witnessed. A short period before World War I is referred to as golden age of
globalization characterized by relative peace, free trade, financial and economic
stability. Growth in international exchange of goods accelerated in the second quarter
of the
19th century. Global economy in the 19th and 20th centuries grew by an average of
nearly 4 percent per annum, which is roughly twice as high as growth in the national
incomes of the developed economies since the late 19th century.

11. Thank you
Thank you
very much!
very much!