Market Integration Flashcards
- play a significant role in shaping the global economy by providing financial assistance, promoting economic development, fostering global financial stability, and encouraging international cooperation.
International Financial Institutions (IFI)
The __ __ __ helps countries facing balance of payment crises by offering short-term financial assistance. In return,
countries often adopt economic reforms, such as fiscal discipline or trade liberalization, which can stabilize both national and global markets.
International Monetary Fund
work with IFIs to promote international trade by reducing trade barriers, establishing trade agreements, and resolving disputes. This promotes a more integrated global economy.
World Trade Organization
part of the World Bank Group, encourages private sector investment
in developing countries, thereby promoting entrepreneurship and job creation.
International Finance Corporation
Institutions like the World Trade Organization (WTO) work with IFIs to promote international trade by reducing trade barriers, establishing trade agreements, and resolving disputes. This promotes a more integrated global economy.
Support Trade and Investment
offer technical expertise and policy guidance to help countries manage their economies.
IFIs
offer emergency funds during global or regional financial crises.
IFIs
serve as platforms for international dialogue and cooperation among countries.
IFIs
These policies address large-scale economic factors and are designed to affect the entire economy.
Macroeconomic Policies
A commonly used macroeconomic tool to boost exports. By reducing the value of the national currency, domestic
goods become cheaper in international markets, which makes exporting more attractive.
Exchange Rate Devaluation
- focus on smaller, specific parts of the economy, like individual firms, sectors, or markets. They address issues such as
market competition, regulations, and the functioning of specific industries.
Microeconomic Policies
- refers to reforms or reorganizations within the financial system aimed at improving its stability, efficiency, and ability to promote economic growth.
Financial Structuring
- A key issue in strengthening the financial sector is to do so in ways that enable it to more effectively fulfill its role in promoting economic growth.
Financial Restructuring
- refers to the system by which companies are directed and controlled, with a focus on balancing the interests of stakeholders such as shareholders, management, and creditors.
Corporate Governance
- these occur when companies rely heavily on borrowing (debt) relative to their equity (ownership capital). While debt can boost returns, excessive debt increases financial risk, making companies more vulnerable to economic downturns and financial distress.
High Debt-Equity Ratios
- plays a critical role in ensuring that companies maintain sustainable financial practices, including managing their debt-equity ratios effectively
Corporate governance
A _____ _____ _____ indicates a company relies heavily on debt (loans) to finance its operations, which can
increase financial risk, especially during economic downturns.
high debt-equity ratio
offering tax benefits for companies that issue new equity (shares) can encourage a shift towards more sustainable financing strategies.
Tax Policy Reform
are designed to mitigate systemic risks across the entire financial system, can help prevent excessive leverage from building up and destabilizing the economy.
Macro-prudential Policies
These policies monitor and limit the risk exposure of highly leveraged sectors or companies.
Macro-prudential Policies
In a market economy, dispersed information from individuals and firms is aggregated through _______, which reflect supply and demand conditions.
prices
- aims to balance economic growth with social protection to ensure inclusive development.
- plays a critical role in fostering long-term development and poverty alleviation.
World Bank
Early global corporations, such as the Dutch East India Company and British East India Company, emerged to facilitate international trade, particularly in spices, textiles, and precious metals. These corporations played a central role in expanding global commerce and connecting distant economies.
Trade and Exchange (17th century)
- During this period, European powers expanded their colonies, and corporations were often tools of imperial expansion.
Colonialism and Imperialism (19th Century)
- The __th century saw the rise of multinational corporations from the U.S., Japan, and Europe.
American, Japanese, and European Corporations (20th Century)
was a British trading corporation formed in 1600 with a royal charter to exploit trade opportunities in India, East Asia, and Southeast Asia.
East India Company
It began as a joint-stock company to secure lucrative trade routes, especially for spices, silks, tea, and other valuable
goods from these regions.
East India Company
The term “_________” gained prominence during this period to describe the expansionist policies of powerful nations, particularly following the U.S.-Spanish War in 1898.
Imperialism
He analyzed a new phase of capitalism, where financial capital (banks and financial institutions) became dominant over industrial capital.
Rodolf Hilferding
He discussed the rise of holding companies and sister companies as key instruments of control in the global economy, allowing financial capitalists to consolidate power and influence across industries and borders.
Rodolf Hilferding
refers to the practice of acquiring and maintaining direct control over a foreign territory, typically by establishing colonies.
Colonialism
refers to a broader policy of domination and influence over foreign nations or regions, not necessarily through direct
colonization, but through economic, political, or military power. It often involves exerting control from afar without the need for large-scale settlement.
Imperialism
- Companies that engage in importing and exporting, but have no foreign investments or physical presence outside their home country.
International Companies
- These corporations have investments and a physical presence in multiple countries, but they standardize products and services for a global audience.
Global Companies
Focuses on creating a consistent brand and offering similar products globally, rather than customizing for local markets.
Global Companies
- thave investments in various countries but tailor their products and services to suit each local market’s needs.
- Adaptation to local cultures, preferences, and market conditions.
Multinational Companies
- These complex organizations invest in foreign operations and have a central corporate facility, but they delegate
decision-making power, research, and marketing to individual markets. Its strategies combine a global presence with local autonomy, enabling flexibility and responsiveness to local demands.
Transnational Companies
• The international company’s birth from 1900 especially after Security and
Exchange organization (SEC) was
founded in 1933 and law of establishment investing companies in 1940 in United
States.
American, Japanese and European
Corporations
• The economic & political media used for first time “Imperialism” terminology for period of U.S. and Spanish war (1898).
Colonialism and Imperialism (19th
Century)
• the governor and a United Company of Merchants of England Trading to the East Indies. The company was formed for the exploitation of trade with India, East and Southeast Asia
East India Company (English East India
Company - 1600–1708)
It focuses on project lending and
structural reforms that enhance long-run development and poverty alleviation.
World Bank
• In a world where private-to-private capital flows are increasingly important,
institutions need to recognize that
monitoring and surveillance are going to be especially challenging.
The importance and limitations of
information
• Creating a robust policy regime that
minimizes the long-term consequences of the inevitable fluctuations in economic activity, including preventing crises and setting up mechanisms for orderly workouts when they do occur
Preventing Crises by Controlling
Capital Flows
• Governments should correct the tax,
regulatory, and banking practices that
encouraged the high debt-equity ratios.
Corporate governance
