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    Ibt - Chapter 1

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    John Gins Urma
    This document provides an overview of a module on globalization. It defines globalization as the shift toward a more integrated and interdependent world economy. The module aims to help students understand what globalization is, its main drivers like declining trade barriers and advances in technology, how it is changing the global economy, and the debates around its impact. It also explains how globalization involves both the globalization of markets and production through sourcing globally. Key global institutions that support and regulate globalization like the WTO, IMF, World Bank and UN are also summarized.

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    Ibt - Chapter 1

    Uploaded by

    John Gins Urma
    57 views2 pages
    This document provides an overview of a module on globalization. It defines globalization as the shift toward a more integrated and interdependent world economy. The module aims to help students understand what globalization is, its main drivers like declining trade barriers and advances in technology, how it is changing the global economy, and the debates around its impact. It also explains how globalization involves both the globalization of markets and production through sourcing globally. Key global institutions that support and regulate globalization like the WTO, IMF, World Bank and UN are also summarized.

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    International Business and Trade

    Original Title

    IBT - CHAPTER 1 -

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    This document provides an overview of a module on globalization. It defines globalization as the shift toward a more integrated and interdependent world economy. The module aims to help students understand what globalization is, its main drivers like declining trade barriers and advances in technology, how it is changing the global economy, and the debates around its impact. It also explains how globalization involves both the globalization of markets and production through sourcing globally. Key global institutions that support and regulate globalization like the WTO, IMF, World Bank and UN are also summarized.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    57 views2 pages

    Ibt - Chapter 1

    Uploaded by

    John Gins Urma
    This document provides an overview of a module on globalization. It defines globalization as the shift toward a more integrated and interdependent world economy. The module aims to help students understand what globalization is, its main drivers like declining trade barriers and advances in technology, how it is changing the global economy, and the debates around its impact. It also explains how globalization involves both the globalization of markets and production through sourcing globally. Key global institutions that support and regulate globalization like the WTO, IMF, World Bank and UN are also summarized.

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    of 2

    MODULE IN AE 5 International Business and Trade (IBT)

    I. Lesson Title: GLOBALIZATION

    II. Learning Outcomes

    By the end of this module, the student should be able to:

    1. Understand what is meant by the term globalization


    2. Be familiar with the main drivers of globalization
    3. Appreciate the changing nature of the global economy
    4. Understand the main arguments in the debate over the impact of globalization
    5. Appreciate how the process of globalization is creating opportunities and challenges for business
    managers

    III. Introduction

    Over the last three decades a fundamental shift has been occurring in the world economy. We have been
    moving away from a world in which national economies were relatively self-contained entities, isolated
    from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and
    by national differences in government regulation, culture, and business systems. And we are moving toward
    a world in which barriers to cross-border trade and investment are declining; perceived distance is shrinking
    due to advances in transportation and telecommunications technology; material culture is starting to look
    similar the world over; and national economies are merging into an interdependent, integrated global
    economic system. The process by which this is occurring is commonly referred to as globalization.

    IV. Course Content

    WHAT IS GLOBALIZATION?

    Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization
    has several facets, including the globalization of markets and the globalization of production.

    THE GLOBALIZATION OF MARKETS

    The globalization of markets refers to the merging of historically distinct and separate national markets into
    one huge global marketplace.

    THE GLOBALIZATION OF PRODUCTION

    The globalization of production refers to sourcing goods and services from locations around the globe to
    take advantage of national differences in the cost and quality of factors of production (such as labor, energy,
    land, and capital).

    THE EMERGENCE OF GLOBAL INSTITUTIONS

    - General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO)
    - International Monetary Fund (IMF) and its sister institution, the World Bank
    - United Nations

    The World Trade Organization is primarily responsible for policing the world trading system and making
    sure nation states adhere to the rules laid down in trade treaties signed by WTO member states.
    The International Monetary Fund and the World Bank were both created in 1944 by 44 nations that met
    at Bretton Woods, New Hampshire. The IMF was established to maintain order in the international
    monetary system; the World Bank was set up to promote economic development.

    World Bank has focused on making low-interest loans to cash-strapped governments in poor nations that
    wish to undertake significant infrastructure investments (such as building dams or roads).
    IMF is often seen as the lender of last resort to nation-states whose economies are in turmoil and currencies
    are losing value against those of other nations.
    The United Nations was established October 24, 1945, by 51 countries committed to preserving peace
    through international cooperation and collective security. The UN has four purposes:
    1. to maintain international peace and security
    2. to develop among nations
    3. to cooperate in solving international problems and in promoting respect for human rights
    4. to be a center for harmonizing the actions of nations

    Although the UN is perhaps best known for its peace-keeping role, one of the standards of living, full
    organization's central mandates is the promotion of hiss and development-all employment, and conditions of
    economic and social issues that are central to the creation of a vibrant global economy.

    G20 Established in 1999,the G20 comprises the finance ministers and central bank governors of the 19
    largest economies in the world, plus representatives from the European Union and the European Central
    Bank.

    DRIVERS OF GLOBALIZATION

    Two macro factors underlie the trend toward greater globalization.


    1. the decline in barriers to the free flow of goods, services, and capital that has occurred since the end of
    World War II.
    2. technological change, particularly the dramatic developments in recent years in communication,
    information processing, and transportation technologies.

    DECLINING TRADE AND INVESTMENT BARRIERS

    During the 1920s and 30s many of the world's nation-states erected formidable barriers to international trade
    and foreign direct investment. International trade occurs when a firm exports goods or services to
    consumers in another country. Foreign direct investment (FDI) occurs when a firm invests resources in
    business activities outside its home country. Many of the barriers to international trade took the form of high
    tariffs on imports of manufactured goods. The typical aim of such tariffs was to protect domestic industries
    from foreign competition. One consequence, however, was "beggar thy neighbor" retaliatory trade policies,
    with countries progressively raising trade barriers against each other. Ultimately, this depressed world
    demand and contributed to the Great Depression of the 1930s.

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