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Definition of Globalization

Globalization refers to the increasing integration and interdependence of economies and societies around the world. It involves technological, economic, political and cultural exchanges between countries. There are two types of integration in globalization - negative integration which breaks down trade barriers like tariffs and quotas, and positive integration which aims to standardize international economic laws and policies. The key effects of globalization include increased international trade, technological progress, the rise of multinational corporations, and strengthened international organizations.

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2K views22 pages

Definition of Globalization

Globalization refers to the increasing integration and interdependence of economies and societies around the world. It involves technological, economic, political and cultural exchanges between countries. There are two types of integration in globalization - negative integration which breaks down trade barriers like tariffs and quotas, and positive integration which aims to standardize international economic laws and policies. The key effects of globalization include increased international trade, technological progress, the rise of multinational corporations, and strengthened international organizations.

Uploaded by

Sheena Alcalde
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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Definition of Globalization

Globalization is the system of interaction


among the countries of the world in order to
develop the global economy.
• 1. It refers to the
integration of economies
and societies all over the
world
2. It involves technological,
economic, political, and cultural
exchanges made possible
largely by advances in
communication, transportation,
and infrastructure.
There are two types of integration
•Negative integration
•Positive integration
A.Negative integration
is the breaking down of trade
barriers or protective barriers
such as tariffs and quotas.
Tariffs
- Tariffs are taxes on imported goods and
services to make them expensive, and
discourage purchases by residents, and protect
local industries.
Quota
• A quota is a government-imposed trade
restriction that limits the number or monetary
value of goods that a country can import or
export during a particular period.
Benefits of Negative Integration:
- It is beneficial for a country if it allows for
products that are important or essential to the
economy.
- the costs of imported raw materials will go down
- supply will increase, making it cheaper to
produce the final products for export (like
electronics, car parts, and clothes).
B. Positive integration
• aims at standardizing
international economic laws
and policies
B. Positive integration
– For example, a country which has its own policies
on taxation trades with a country with its own set
of policies on tariffs. Likewise, these countries
have their own policies on tariffs. With positive
integration (and the continuing growth of the
influence of globalization), these countries will
work on having similar or identical policies on
tariffs.
Effects of Globalization

How to identify the changes brought by


globalization.

1. Improvement of International Trade.


• Because of globalization, the number of
countries where products can be sold or
purchased has increased dramatically.
Effects of Globalization
How to identify the changes brought by
globalization
2. Technological
.
Progress. Because of the
need to compete and be competitive globally,
governments have upgraded their level of
technology.
Effects of Globalization
How to identify the changes brought by
globalization
3. Increasing Influence of Multinational
Companies. A company that has subsidiaries
in various countries is called a multinational.
Often, the head office is found in the country
where the company was established.
An example :
• a car company whose head office is based in
Japan. This company has branches in different
countries. While the head office controls the
subsidiaries, the subsidiaries decide on
production. The subsidiaries are tasked to
increase the production and profits. They are
able to do it because they have already
penetrated the local markets.
An example :
•The rise of multinational corporations
began after World War II. Large
companies refer to the countries where
their subsidiaries reside as host
countries. Globalization has a lot to do
with the rise of multinational
corporations.
Effects of Globalization
4. Strengthen the Power of the WTO, IMF, and
WB.
• According to experts, another effect of
globalization is the strengthening power and
influence of international institutions such as
the World Trade Organization (WTO),
International Monetary Fund (IMF), and World
Bank (WB).
Effects of Globalization
5. Greater Mobility of Human Resources
across Countries.
• Globalization allows countries to source their
manpower in countries with cheap labor. For
instance, the manpower shortages in Taiwan,
South Korea, and Malaysia provide
opportunities for labor exporting countries
such as the Philippines to bring their human
resources to those countries for employment.
Effects of Globalization
6. Greater Outsourcing of Business Processes
to Other Countries.
China, India, and the Philippines are
tremendously benefiting from this trend of
global business outsourcing. Global
companies in the US and Europe take
advantage of the cheaper labor and highly-
skilled workers that countries like India and
the Philippines can offer
Effects of Globalization
7. Civil Society.
An important trend in globalization is the
increasing influence and broadening scope of
the global civil society.
Civil society often refers to NGOs
(nongovernment organizations). There are
institutions in a country that are established
and run by citizens. The family, being an
institution, is part of the society. In
globalization, global civil society refers to
organizations that advocate certain issue or
cause to broaden globalization.
conclusion
• The spread of globalization led to greater
influence of NGOs especially in areas of great
concern like human rights, the environment,
children, and workers. Together with the
growing influence of NGOs is the increasing
power of multinational corporations. If the
trend continues, globalization will pave the
way for the realization of the full potential of
these two important global actors.

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