Professional Documents
Culture Documents
The Impact of Globalization in The Developing Countries
The Impact of Globalization in The Developing Countries
The Impact of Globalization in The Developing Countries
Introduction
Components of Globalization
The phenomenon seems to be driven by three major forces: the globalization of all
product and financial markets, technology, and deregulation. Globalization of
product and financial markets refers to an increased economic integration in
specialization and economies of scale, which will result in greater trade in financial
services through both capital flows and cross-border entry activity. The technology
factor, specifically telecommunication and information availability, has facilitated
remote delivery and provided new access and distribution channels, while
revamping industrial structures for financial services by allowing entry of non-
bank entities, such as telecoms and utilities.
CONCEPT OF GLOBALIZATION
Globalization can be seen as one of the most important force that has impact on the
economy. It is accepted that the world economy has become more integrated due to
the
process of globalization (Neuland & Hough, 1999). Redding (1999) defines
globalization
as the increasing integration between the markets for goods, services and capital.
Globalization in the broadest sense implies integration of economies and societies
across
the globe through flows of technology, trade and capital. Integration of production,
accelerated cross-border investments and more trade are the logical outcomes of
this
process. While most people seem to agree what globalization is in general, there
are no
precise or optimal measures of globalization. Given the inherent fuzziness of the
concept,
moreover, it is unlikely that a perfect measure will emerge. This makes it very
difficult to
measure the impact of globalization on anything. However, this does not make the
analysis
redundant. Where measures are required, it seems best to treat particular
(quantifiable)
aspects separately, acknowledging that this does not amount to a complete analysis
of
globalization.
Robertson (1992) is probably one of the most quoted on the subject of
globalization and has defined the concept as referring to a compression of the
world as a
whole and as a concrete global interdependence and consciousness of the global
whole.
Contained within this definition is the explicit understanding that although global
compression has been ongoing for many centuries, the relatively new phenomenon
of
globalization adds to this the intensification of a global consciousness, is the most
important element of his definition.
The Chittagong University Journal of Business Administration, Vol. 23, 2008, pp.
313-330
3
Hrist (2002) defined globalization as the increasing extent, intensity, velocity and
impact of world-wide interconnectedness, which has existed for some hundreds of
years.
Globalization, for him, is not an end state, or a single thing, any more than is
democracy or
industrialization that is being re-contextualised in a more complex world of
economics,
politics, culture and migration. By acknowledging this dimension a more precise
definition of globalization can be offered. Accordingly, globalization can be
thought of as “a process (or set of processes) which embodies a transformation in
the spatial organisation of social relations and transactions – assessed in terms of
their extensity, intensity, velocity and impact – generating transcontinental or
interregional flows and networks of activity, interaction, and the exercise of
power” (Held, McGrew, Goldblatt, &
Perraton, 2003; p 68).
Globalization is different from internationalization, a term that carries a specific
emphasis on the dismantling of national barriers to the flows of information,
goods,
services, capital, technology, values and culture (Chittiwatanapong, 1997).
Therefore, the
term globalization refers here, in this study, to the trend reduction in barriers to the
international movement of goods, services, capital and technology.