CONTEMPORARY REVIEWER

*The Concept of Globalization*

Globalization is the process by which the world, previously isolated through physical and technological distance,
becomes increasingly interconnected. It is manifested by the increase in interaction between peoples around the
world that involves the sharing of ideas, cultures, goods, services and investmen.
Globalization Refers to geographic dispersion of industrial and service activities for example research and
development, sourcing of inputs, production and distribution and the cross-border networking of companies for
example through joint ventures and the sharing of assets.
Rejectionist Refers to the scholar who dismiss the usefulness of the term globalization
Skeptics Refers to the scholar who emphasize the limited nature of the concept of globalization
Modifiers Argue that globalization is a historically imprecise concept
Globalization is still a much-debated concept as to its definition and scope. Arguments on its definition can be
divided into three groups of scholars: the rejectionists, the skeptics, and the modifiers. In order to better understand
theconcept of globalization, we should also understand its dimensions: economic, political, and global.
*The Study of Globalization*
GLOBALIZATION The increased of interconnectedness, and interdependence of people and countries around the
world. ACCORDING TO WHO
-The word used to describe the growing interdependence of the world’s economies, cultures, and populations,
brought about by cross-border in goods and services, technology, people, and information.
-Peterson Institute for International Economics
*Four Dimensions of Globalization*
 Cultural Globalization
 Economic Globalization
 Political Globalization
 Ecological Globalization
Cultural Globalization - refers to the intensification and expansion of cultural flows across the globe.
Political Globalization - refers to the globalization as the intensification and expansion of political interrelations
around the world.
Economic Globalization - refers to philosophy of consumerism encourages the acquisition of goods and services
in an increasing amount
Ecological Globalization - refers to worldwide environmental issues which include population growth, access to
food, global reduction in biodiversity, the gap between the rich and the poor, between the global North and the
global South, human-included climate, and global environmental degradation.
*Underlying Philosophies and ideologies in Globalization*
Market Globalization refers to the idea that economic activities, such as trade and investment, are increasingly
interconnected in global scale
Justice Globalism also known as global justice, is a perspective that focuses on fairness and equality for people
around the world.
Religious Globalism is an idea that religious beliefs are shared and respected worldwide, going beyond specific
countries or cultures.
*Steger considers market globalization as;*
Globalization is about the liberalization and global integration of markets.
Globalization is inevitable and irreversible. Nobody oversees globalization.
Globalization benefits everyone.
Globalization furthers the spread of democracy in the world.
Globalization requires war on terror.
GLOBAL ECONOMY Refers to the interconnected network of economic activities, trade, and financial
transactions that take place between countries around the world. It encompasses the production, distribution, and
consumption of goods and services on a global scale, as well as the flow of capital, labor, and technology across
borders. In simple terms, it's the sum total of all economic interactions and transactions between countries,
influencing factors such as international trade, investment, and economic growth.
International Trading System -Is a framework that governs the exchange of goods and services between
countries. It involves the buying, selling, and movement of products across national borders. This system includes
rules, agreements, and institutions that facilitate trade among nations
Importance of International Trade-It lies in its ability to allow countries to exchange goods and services,
enabling them to access products they can't make or affordably buy domestically. This exchange not only makes
prices more reasonable for consumers but also encourages economic growth by opening up new markets for
businesses. Additionally, international trade strengthens diplomatic ties between nations, fostering unity and
cooperation for a more prosperous global community.
WHAT IS FOREIGN TRADE? Also known as international trade, refers to the exchange of goods and services
between two or more countries. It's the process of buying and selling goods or services outside one's own country.It
allow countries to access products they cannot produce or affordably buy domestically and opens up opportunities
for economic development and growth.
ADVANTAGES OF FOREIGN TRADE Helps each country to specialize in the production of those goods,
which best suits its environment. It thus leads to maximum use of its natural resources. It enables a country to
obtain goods by importing which cannot produce due to higher costs at home.
FOREIGN TRADE POLICY A set of guidelines and regulations established by a country to manage and regulate
its international trade relationships. It includes policies and measures designed to promote exports, control imports,
regulate tariffs and duties, facilitate trade agreements, and address trade-related issues such as tariffs, quotas, and
trade barriers.
IMPORTANCE OF GLOBAL TRADE Countries trade with each other when, on their own, they do not have the
resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce
resources, countries can produce a surplus, and trade this for the resources they need
THEORY OF INTERNATIONAL TRADE International trade theories are simply different theories to explain
international trade. Trade is the concept of exchanging goods and services between two people or entities.
International trade is then the concept of this exchange between people or e entities in two different countries.
CLASSICAL COUNTRY BASED THEORY
•Mercantilism •Absolute Advantage
•Comparative Advantage •Heckscher-Ohlin
MODERN FILM BASED THEORY
•Country Similarity •Product Life Cycle
•Global Strategic Rivalry •Porter's National Comparative Advantage
Mercantilism This theory stated that a country’s wealth was determined by the amount of its gold and silver
holdings. In it’s simplest sense, mercantilists believed that a country should increase its holdings of gold and silver
by promoting exports and discouraging imports.
The Heckscher-Ohlin Theory (factor proportion theory) The theory developed by two Swedish economists, Eli
Heckscher and Bertil Ohlin, in the early 1900s suggests that countries can gain a comparative advantage by
producing products that utilize factors that are in abundance in the country, such as land, labor, and capital. The
cost of any factor is a function of supply and demand, with factors in great supply relative to demand being
cheaper, and factors in great demand relative to supply being more expensive.
Absolute Advantage In 1776, Adam Smith questioned the leading mercantile theory of the time in The Wealth of
Nations. Smith offered a new trade theory called absolute advantage, which focused on the ability of a country to
produce a good more efficiently than another nation.
Country Similarity Theory Swedish economist Steffan Linder developed the country similarity theory in 1961, as
he tried to explain the concept of intraindustry trade. Linder’s theory proposed that consumers in countries that are
in the same or similar stage of development would have similar preferences.
Comparative advantage David Ricardo, an English economist, introduced the theory of comparative advantage in
1817. Comparative advantage occurs when a country cannot produce a product more efficiently than the other
country; however, it can produce that product better and more efficiently than it does other goods.
Product life Cycle Theory Raymond Vernon, a Harvard Business School professor, developed the product life
cycle theory in the 1960s. The theory, originating in the field of marketing, stated that a product life cycle has three
distinct stages: (1) new product, (2) maturing product, and (3) standardized product. The theory assumed that
production of the new product will occur completely in the home country of its innovation
Global Strategic Rivalry Theory Global strategic rivalry theory emerged in the 1980s and was based on the work
of economists Paul Krugman and Kelvin Lancaster. Their theory focused on MNCs and their efforts to gain a
competitive advantage against other global firms in their industry. Firms will encounter global competition in their
industries and in order to prosper, they must develop competitive advantages. The barriers to entry refer to the
obstacles a new firm may face when trying to enter into an industry or new market. The barriers to entry that
corporations may seek to optimize include:
•research and development, •the ownership of intellectual property rights,
•economies of scale, •unique business processes or methods as well as extensive experience in the industry,
and •the control of resources or favorable access to raw materials.
*The benefits of trading internationally*
•VARIETY OF GOODS
•OUTLET FOR SURPLUSES
•REDUCTION OF MARKET FLUCTUATIONS
•LOWER COSTS
 •PRODUCTION EFFICIENCY
•RESOURCE SPECIALIZATION
•INNOVATION
•INVESTMENT
*Man-made trade barriers come in several forms,including:*
 TARIFFS
 NON TARIFF BARRIERS FO TRADE
 IMPORT LICENSES
 EXPORT LICENSES
 IMPUT QUOTAS
 SUBSIDIES
 VOLUNTARY EXPORT RESTRAINTS
 LOCAL CONTENT REQUIREMENTS
BRETTON WOODS SYSTEM of monetary management established the rules for commercial and financial
relations among the United States, Canada, Western Europe, Australia, and Japan after the 1944 Bretton Woods
Agreement.
-The first system used to control the value of money between different countries.It meant that each country had to
have a monetary policy that kept the exchange rate of its currency within a fixed value-plus or minus one percent-
interms of gold
*BRETTON WOODS SYSTEM*
Purpose To set up a new system of rules, regulations, and procedures for the major economies of the world to
ensure their economic stability. To do this, Bretton Woods established The International Monetary Fund (IMF) and
the World Bank.
conference Known as the United Nations Monetary and Financial Conference, was a gathering of delegates from
44 nations that met from July 1 to 22, 1944 in Bretton Woods, New Hampshire, to agree upon a series of new rules
for the post-WWII international monetary system
*GLOBAL INTERSTATE SYSTEM*
Global interstate system - It is the whole system of human interactions. The modern world system is
structured politically as an interstate system a system of competing and allying states. Political scientists
commonly call this the international system and this is the focal point of the field of international relations.
*Divisions of Labor*
CORE - high income nations in the world economy. This is the manufacturing base of the planet where resources
funnel in to become the technology and wealth enjoyed by the Western World today. They are dominant capitalist
countries that exploit peripheral countries for labor and raw materials.
Semi – Periphery -are the middle-income countries, such as India and Brazil. These are considered semi-periphery
due to their closer ties to the global economic core.Peripheral countries share characteristics of both core and
peripheral countries
Periphery –
  called as the low-income countries, whose natural resources or labor support the
wealthier countries, first as colonies and now by working for multinational corporations under
neocolonialism
 Peripheral countries are dependent on core countries for capital and have
underdeveloped industry.

*Effects of globalization on government (positive effects)*

1.Economic growth, and development
-globalization has contributed to increase economic growth and development by allowing governments to access
new markets at track, foreign investment and technology and participate in international trade agreements
2. Improved infrastructure and technology.
-Develop countries to developing ones, leading to improvements in transportation, communication, and
information technology.
3. Access to global resources.
-Globalization has allowed governments to access global resources, such as capital, knowledge and technology,
enabling them to address, pressing, social, and economic challenges more effectively.
*Effects of globalization on government(negative effects)*
1. Displaced agricultural production
-Global corporation is demanding lower taxes and lower income wage
2. Loss of sovereignty
- globalization can limit the decision making power of governments, as they are required to adhere to international
agreements, trade regulations, and standard set by international organizations
3. Environmental degradation

- The increased global trade and movement of goods have led to significant environmental impacts such as
pollution, deforestation, and greenhouse gas emissions.
Internationalism - Cooperation with one another in political, economic, and cultural aspects for promotion of
common good.
Globalism -The belief that people,good and information ought to be able to cross borders freely. It is an attitude of
putting the interest of the entire world above the interests of individual nation.