GLOBAL MARKET Flashcards
The process of unifying separate markets into a single global marketplace
Market integration
- Increased interconnection between national economies.
- Driven by trade, investment, and the role of international financial institutions
MARKET INTEGRATION
3 KEY INTERNATIONAL FINANCIAL INSTITUTIONS
- International Monetary Fund (IMF)
- World Bank
- World Trade Organization (WTO)
Stabilizes international exchange rates and facilitates global monetary cooperation
International Monetary Fund (IMF)
Provides financial and technical assistance for development projects to reduce poverty
World Bank
Facilitates international trade by regulating and promoting free trade agreements
World Trade Organization (WTO)
The beginnings of market integration during the colonial era and industrial revolution
Pre-20th Century
World War I and II disrupted markets, but post-WWII efforts created new global structures (e.g., Bretton Woods).
Early 20th Century
- 1944 Bretton Woods Conference: Established IMF, World Bank, and set the foundation for global trade.
- Formation of GATT in 1947 (later WTO in 1995), leading to the reduction of trade barriers and tariffs.
- The rise of multinational corporations and increased cross-border investments.
Post WWII Integration
What established the IMF, World Bank, and set the foundation for global trade
1994 Bretton Woods Conference
What lead to the reduction of trade barriers and tarrifs
Formation of GATT in 1947 (later WTO in 1995)
- Expansion of free trade agreements (e.g., NAFTA in 1994, the European Union’s single market).
- Globalization’s acceleration with technological advancements and the digital revolution.
Late 20th Century
5 Key characteristics/attributes of Global Corporations
- Global reach
- Supply Chains
- Market Dominance
- Innovations
- Responsibility
5 Key characteristics/attributes of Global Corporations: Operations in
multiple countries with a centralized headquarters (e.g., Apple, Toyota)
Global reach
5 Key characteristics/attributes of Global Corporations: Complex global supply chains that span several countries for manufacturing, sourcing, and distribution
Supply Chains
5 Key characteristics/attributes of Global Corporations: Significant influence over global markets and the ability to shape industry trends
Market Dominance
5 Key characteristics/attributes of Global Corporations: Continuous investment in research and development to maintain competitiveness
Innovation
5 Key characteristics/attributes of Global Corporations: Corporate social responsibility (CSR) efforts, including sustainability and ethical practices
Responsibility
3 Key Drivers of Market Integration
- Technological Advancement
- Trade Liberalization
- Financial Market
2 impacts of Global Corporations on Market Integration
- Economic Influence
- Social and Environmental Impacts
3 challenges to Market Integration
- Global Inequality
- Economic Dependencies
- Global Governance
- Unequal distribution of benefits, with wealth concentrated in developed nations and corporations.
- Exploitation of labor in developing nations due to differences in regulations.
Global Inequality
The risk of economic instability when too reliant on global supply chains, highlighted by the COVID-19 pandemic
economic dependencies
The need for better international governance to ensure fair trade practices and global economic stability
Global governance