What is the role of market integration in the global economy?

- Market integration provides a number of social benefits, including broadening the

range of financial services and investment opportunities available to
consumers and increasing competition in the provision of those services.

- Market integration occurs when prices among different locations or related goods

follow similar patterns over a long period of time. Groups of goods often move
proportionally to each other and when this relation is very clear among different markets it is
said that the markets are integrated.

Professor Emeritus at the Corvinus University of Budapest Tamás Szentes expounds economic

globalization by explaining that in economic terms, “globalisation is nothing but a process
making the world economy an “organic system” by extending transnational economic processes
and economic relations to more and more countries and by deepening the economic
interdependencies among them” (Benczes, 2014).

Among other things, this explanation asserts that economic activities and processes in
economic globalization, such as production, can be interpreted only in a global context, that is,
in an integrated world economy or globalization economy.

Contemporary sociologists mention some potential benefits as well as costs of economic

integration. Some of the advantages usually mentioned are the following:

1. As regards trade benefits, global economic integration characteristically leads to a decrease

in the cost of trade, better availability and a broader selection of goods and services, and
efficiency gains that cause greater purchasing power.

2. In employment, opportunities tend to increase because trade liberalization causes market

expansion, technology sharing, and cross-border investment flows.

3. Because of tighter economic ties, political cooperation among nations can improve, which
can help resolve clashes peaceably and thus lead to greater stability.
 

4. Global economic integration upholds free trade which promotes global economic growth,
generates jobs, makes companies more competitive, and lowers prices for consumers.
Economic integration prompts transnational companies to invest and install plants in other
countries, thereby providing employment for the people in those nations usually getting them
out of poverty.

5. There are more inflow of information among two countries and cultural intermingling where
each nation learns more about other cultures. Socially, people have become more open and
tolerant towards each other as those who live in the other parts of the globe are not considered
aliens.

6. Many consider swift travel, mass communications, and speedy dissemination of information,
such as through the Internet, as benefits of economic integration and globalization.

In spite of the advantages, economic integration has also assumed costs like the following:

1. Economic integration results in the erosion of national sovereignty. Members of economic

unions are normally mandated to adhere to rules on trade, monetary policy, and fiscal policy,
which are developed by an unelected external policymaking body.

2. Big multi-national corporations can exploit tax havens in other nations to avoid paying taxes.
They are also accused of social injustice, unfair working conditions (including slave labor wages,
child labor, and prisoners used to work), as well as lack of concern for environment (such as,
mishandling of natural resources and ecological damage).

3. Transnational companies and multinational corporations are progressively influencing

political decisions. There is thus a threat of these corporations ruling the globe as they gain
more and more power due to economic integration and globalization.

 
4. Some claim that economic integration and globalization lead to the infiltration of
communicable diseases. Fatal diseases like HIV/AIDS are disseminated by tourists even to the
remotest corners of the world. Increase in human trafficking is also attributed to globalization.

5. Globalization and economic integration are said to have made the rich richer and the non-
rich poorer. Global economic integration may be wonderful for managers, owners, and
investors, but ‘hell’ on poor laborers. Although competition among countries is supposed to
drive prices down, in many cases this is not happening as countries manipulate their currency
to get a price advantage.

6. For developed countries, jobs are lost and moved to lower cost countries. Laborers in
developed countries face pay-cut demands from establishments who threaten to export jobs.
This produces a culture of fear for many middle class workers who have slight leverage in this
global game.

https://www.studocu.com/ph/document/notre-dame-university/english-language/chapter-2-
the-structures-of-globalization-the-global-economy-market-integration/22657258