Structures of Globalization
!. GLOBAL ECONOMY
2 Types of Economy
A. Protectionism protecting economy from
international trade
B. Free Trade - promotes
international trade
Characteristics of Global
Economy
!. Globalization
#. International Trade $. International Finance financial globalization,
transferring money
internationally,
exchange money
%. Global Investment investment not
constrained by global
boundaries
Attributes of global economy
!. Globalization of Trade
and Goods and Services
- ensures trade flows
smoothly
#. Financial and Capital
Markets - a company
establishes business in
another country
$. Technology and
Communication - easier
to do business, to
communicate
%. Production Economic Importance:
Microeconomics - study of
individual
Macroeconomic- study of
whole nation
Who is involved in Global
Economy?
!. Individual and
households- primary
consumers of products
#. Firm or businesses -
distributor of products
and services
$. Government - regulates
policies
%. Financial Institutions financing current
exchange, banks
Effects of Global Economy
!. Increase in investment
#.
$. Greater efficiency and
productivity
%. Increase competition
T. Potential for economic
growth
Benefits
!. Free Trade
#. Movement of Labor
#. MARKET INTEGRATION
- related goods follow
similar patterns
Importance of Market
Integration
!. Economic Growth
#. Price Stability
$. Risk Diversification
%. Cultural exchange
Effects of Market
Integration:
- local products can be
sold all around the globe
– if not integrated, market
is not effective
– Reduce market failure
– Difference in the price
Benefits
– create consistent
narrative
– Improve marketing
campaign performance
– Reducing cost
– Simplifying multichannel
selling procedure