Amity School of Business

Module- 2 New international economic order

RaVI bHASIN

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Truest definition of Globalization

Answer : An English princess with an Egyptian boyfriend crashes in a French tunnel, driving a German car with a Dutch engine, driven by a Belgian who was drunk on Scottish whisky, followed closely by Italian Paparazzi, on Japanese motorcycles; treated by an American doctor, using Brazilian medicines. You probably reading this on an IBM Clone that uses Taiwanese chips, and a Korean monitor..
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What is Globalization
Globalization is the process of international integration of products, technologies, human resources, capital, information and cultures. It is characterized by increasing social and economic openness and growing interdependence between the countries of the world. As globalization progresses, economic, social and political systems of different countries more freely interact with one another and adapt to promote further interaction.
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Levels of Globalization
World level globalization Country level globalization Industry level globalization Firm level globalization
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World level globalization

Main IndicatorsShare of world trade in world GDP Stock of FDI in world as a proportion of GDP Global transaction in foreign exchange as a proportion of world GDP Total BoP receipts of all the countries of the world as a proportion of world GDP
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Country level Globalization

Main Indicators Share of foreign trade in national income. Foreign investment as a proportion to national income. Transactions in foreign exchange as a proportion to total transactions. International investment income flow.

COUNTRY LEVEL-CONTI.

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Emigrant and immigrant population. International tourism traffic. Share of foreign remittances in national income. Sensitivity to changes in economic and social conditions in other regions of the world.

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Industry level globalization

Main indicators Industry exports and imports as a proportion of total industry output. Foreign investment in the industry. Total foreign exchange transactions conducted by the firms of industry. Outsourcing.

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Firm level globalization

Foreign collaborations. Access to foreign markets. Foreign portfolio investment. Foreign joint venturing. Foreign contract manufacturing.

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Characteristics of globalization
Rapid growth in international financial actions Fast growth in trade The emergence of global markets The diffusion of technologies, ideas and communication system

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Advantages of Globalization
Competitive and learning effects Technological gains Larger markets Outsourcing and sub-contracting advantages Greater specialization Price stabilization International investment inflow International economic cooperation.
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Disadvantages of globalization
Spread of economic evils Jobless growth Loss of economic sovereignty External technological dependence Drain of basic raw materials Problem of shift from national priorities High burden of dividend outflow.
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Major Steps Towards Globalization in India

Devaluation of rupee

Market determined exchange rate

Import liberalization Opening up to foreign capital
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Globalization- impact on Indian economy

Capital-oriented Globalization Worsening Distribution Jobless Growth McDonaldization Globalization and Capitalism

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