TCW UNIT TWO

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

1. The rapid growth of information in all types of productive activities.

2. Marketization

A restructuring process that enables state enterprises operate as market-oriented firms by changing the legal environment in which they operate and can be achieved through reduction of state subsidies, organizational restructuring of management such as corporatization, decentralization, and privatization.

1. The globalization of trade of goods and services.

2. The globalization of financial and capital markets.

3. The globalization of technology and communication.

4. The globalization of production

is a functional integration between internationally dispersed activities which means that it is a qualitative transformation rather than quantitative change while internationalization is an extension of economic activities between internationally dispersed activities

otherwise known as multi-national corporation is a corporation that has a homebase, 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.

world system, analysts identify the origin of modernity and globalization through long-distance trade in the 16th 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.

the global economy exists only in trade and exchange rather than production as the world export to World GDP did not reach 1 to 2 percent.

the advent of globalization approaching its modern form is witnessed. A short period before World War I is referred to as the golden age of globalization is characterized by relative peace, free trade, and financial and economic stability

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.

refers to a system that forms rules and standards for facilitating international trade among nations. It helps in reallocating capital and investment from one nation to another. It is the global network of the government and financial institutions that determine the exchange rate of different currencies for international trade.

as rules, customs, instruments, facilities, and organizations for effecting international payments with the main task of facilitating cross-border transactions, especially trade and investment

(From 1870 to 1914), with the help of gold and silver, trade was carried out without any institutional support. (Gold standard) functioned as a fixed exchange rate regime, with gold as the only international reserve.

is a system of backing a country's currency with its gold reserves. Such currencies are freely convertible into gold at a fixed price, and the country settles all its international trade transactions in gold

the use of gold declined due to increased expenditure and inflation which were caused by war and; the Great depression in 1931

730 representatives of 44 nations met at Bretton Woods, New Hampshire, United States, and created a new international monetary system called the Bretton Woods system, the aim of which is to create a stabilized international currency system and ensure monetary stability for all the nations.

ended in 1971 as the trade deficit and growing inflation undermined the value of the dollar in the whole world

was believed to guarantee a non inflationary, stable economic environment, a means for accelerating international trade (and the gold standard functioned as a fixed exchange rate regime, with gold as the only international reserve

refers to a 30- year-long process that began at the end of the 1960s as a form of monetary cooperation intended to reduce the excessive influence of the US dollar on domestic exchange rates, and led, through various attempts, to the creation of a Monetary Union and a common currency.

on the other hand is a 1979 arrangement between several European countries that links their currencies in an attempt to stabilize the exchange rate. This system was succeeded by the European Economic and Monetary Union (EMU), an institution of the European Union (EU), which established a common currency called the euro.

is a permanent fund created by the European Union (EU) to provide emergency assistance to member states within the Union. It raises money through the financial markets and is guaranteed by the European Commission.

on the other hand, is an organization created by the European Union to provide assistance to member states with unstable economies.

managed by the European Investment Bank, a lending institution. The Fund raises money by issuing debt and distributes the funds to eurozone countries whose lending institutions need to be recapitalized who need help managing their sovereign debt or who need financial stabilization.

is the exchange of goods, services, and capital across national borders. It is a multi-million dollar activity, central to the Gross Domestic Product (GDP) of many countries, and it is the only way for many countries to acquire resources. This type of trade allows for greater competition and more competitive pricing in the market

specialization and comparative advantage.

gives consumers and countries the opportunity to be exposed to goods and services not available in their own countries

on the other hand refer to the regulations and agreements of foreign countries. It defines standards, goals, rules, and regulations that pertain to trade relations between countries.

taxes or duties paid for a particular class of imports or exports.

measures that governments or public authorities introduce to make imported goods or services less competitive than locally produced goods and services.

ensures that imported products in the country are of high quality

safeguards the best interest of its trade and citizen.

regulates the trade and business relations between two nations, this policy is formed.

international trade policy under their charter like the International economic organizations.

in most developed countries where an open market economy prevails, international economic organizations support free trade policies.

deals with the global rules of trade between nations with the main function of ensuring that trade flows smoothly, predictably, and freely

is an activity that requires a search for a partner and relation-specific investments.

is the practice of assigning part of the obligations and tasks under a contract to another party known as a subcontractor

1. Firms must search for partners with the expertise that allows them to perform the particular activities that are required.

2. They must convince potential suppliers to customize products for their own specific needs.

3. They must induce the necessary relationship-specific investments in an environment with incomplete contracting.

1. Size of the country can affect the "thickness" of its markets.

2. The technology for search affects the cost and likelihood of finding a suitable partner.

3. The technology for specializing components determines the willingness of a partner to undertake the needed investment in a prototype.

4. The contracting environments can impinge on a firm's ability to induce a partner to invest in the relationship.

refers to how easily two or more markets can trade with each other. It occurs when prices among different locations or related goods follow similar patterns over a long period of time

This is a condition in which stock markets in different countries trend together and depict the same expected risk-adjusted returns.

It is an open market economy between countries facilitated by a common currency and the elimination of technical, regulatory, and tax differences to encourage the free flow of capital and investment across borders

is a business that operates in two or more countries. It also goes by the name "multinational company

in a Global Corporation as corporations go global, capital markets open up within them, giving companies a powerful mechanism for arbitrage across national financial markets.

must balance the opportunities with the challenges of operating in multiple environments in managing their internal markets in building an advantage.

1. Financing

2. Risk management

3. Capital budgeting

A group's tax bill can be reduced by the CFO by borrowing from countries with high tax rates and lending to operations in countries with lower rates

Global firms can offset natural currency exposures through worldwide operations instead of managing currency exposures through financial markets

Getting smarter about valuing investment opportunities CFOs can add value to a Global Corporation as corporations go global, and capital markets open up within them, giving companies a powerful mechanism for arbitrage across national financial markets.

was of corporate origin. It is a major driver of extended global corporate development.

is an acronym for the combined economies of Brazil, Russia, India, China, and South Africa. BRIC, without South Africa, was originally coined in 2003 by Goldman Sachs, which speculates that by 2050 these four economies will be the most dominant

is the first multilateral agreement covering trade in services which was negotiated during the last round of multilateral trade negotiations, called the Uruguay Round, and came into force in 1995.

deals with trade in goods. The two primary objectives of GATTS are to ensure that all signatories are treated equitably when accessing foreign markets, and the second is to promote progressive liberalization of trade and services

is the elevation of capitalism as a mode of production into an ethic, a set of political imperatives, and a cultural logic.

is the power of national governments to make decisions independently of those made by other governments

International Legal Sovereignty

Westphalian Sovereignty

-Interdependence Sovereignty

Domestic Sovereignty

refers to the acceptance of a given state as a member of the international community.

is based on the principle that one sovereign state should not interfere in the domestic arrangements of another.

is the capacity and willingness to control flows of people, goods, and capital into and out of the country.

is the capacity of a state to choose and implement policies within the territory.

is the process of industrial, political, legal, economic, social, and cultural integration of states wholly or partially in Europe.

1. Preferential trading area (PTA) 2. Free trade area 3. Customs union 4. Common market

2. Economic union 6. Economic and monetary union

3. Complete economic integration

happen when there's an agreement on reducing or eliminating tariff (tax or duty to be paid on a particular class of imports or exports) barriers on selected goods imported from other members of countries within the geographical region or areas. The agreement can either be bilateral (between two countries) or multilateral (several countries)

eliminate import tariffs as well as import quotas between signatory countries. Removal of tariff barriers between members, together with the acceptance of a common or unified external tariff against non-members is involved in the Customs Union.

One major step towards economic integration

The trading bloc that has both a common market between members and common trade policy towards non-members, although members are free to pursue independent macro-economic policies

involves a single economic market, a common trade policy, a single currency, and a common monetary policy. It represents a major step in the integration of EU economies

is the final stage of economic integration which member states completely forego the independence of both monetary and fiscal policies

refers to the integration of components within political systems; the integration of political systems with economic, social, and other human systems; and the political processes by which social, economic, and political systems become integrated

This theory focuses on the supranational institutions of the EU of which the main driving forces of integration are interest group activity at the European and national levels, political party activity, and the role of governments and supranational institutions.

The main concept of Intergovernmentalism is emphasizing the role of national states in European integration; in another word, it argues that "European Integration is driven by the interest and actions of nation-states. "

This theory emphasized the importance of institutions in the process of European Integration. Its three key strands are rational choice, sociological and historical

This dominant political theory developed by Andrew Moravsik in 1993 explains European integration. The application of rational institutionalism to the field of European integration is the aim of this theory

This is a new theory of European integration. Writers Liesbet Hooghe and Gary Marks defined MLG as the dispersion of authority across multiple levels of political governance.

can be defined as the mobilization of collective claims by actors located in more than one country and/or addressing more than one national government and/or international governmental organization or another international

It refers to the organizational structures and strategies that may empower oppressed populations to mount effective challenges and resist the more powerful and advantaged elites.

The movement is often labeled the anti-globalization movement by the mainstream media.

is as multifaceted as internationalism. Although globalization and global neoliberalism are frames around which many activists mobilize, the protests and organizations are not the product of a global imaginary but of domestically rooted activists who are the connective tissue of the global and the local, working as activators, brokers, and advocates for claims both domestic and international

is a computer-based technology that facilitates the sharing of ideas and information and the building of virtual networks and communities.

is a movement towards the political integration of transnational actors aimed at negotiating responses to problems that affect more than one state or region. It tends to involve institutionalization

save succeeding generations from the scourge of war; reaffirm faith in fundamental human rights; establish conditions under which justice and respect for the obligations arising from treaties and other sources of international law can be maintained, and promote social progress and better standards of life in larger freedom.

1. Maintaining worldwide peace and security.

2. Developing relations among nations.

3. Fostering cooperation between nations in order. to solve economic, social, cultural, or humanitarian international problems.

4. Providing a forum for bringing countries together to meet the UN's purpose and goals.

in the Twentyfirst Century Global governance can be understood as the sum of laws, norms, policies, and institutions that define, constitute, and mediate trans-border relations between states, cultures, citizens, intergovernmental and nongovernmental organizations, and the market

1. Lifting of trade barriers

2. Liberalization of world capital markets

3. Swift technological progress (information technology, transportation, and communication)

1. poverty, 2. environmental pollution, 3. economic crisis, and 4. organized crime and terrorism.

1. It calls for a transfer of decisions to the international level. 2. It requires many decisions to be transferred to local levels of government due to an increase in the demand for participation.

1. Respect for human rights and justice 2. Promote the national welfare 3. Protect the general interest