MODULE 2 SECTION 2- MARKET INTEGRATION

INTENDED LEARNING OUTCOMES

Explain the role of international financial institutions in

the creation of global economy
Narrate a short history of global market integration in the
20th century
Infer the attributes of global corporations
UNITED NATIONS

After the second World War, almost all countries

around the world faced great challenge of bringing
their feet back on the ground.
As a substitute to the unsuccessful league of
nations, the United Nations (UN) was established
on October 24,1945
UNITED NATION

It was tasked to promote

international cooperation and to
restore international order.
EARLIER 1944

Establishment of first government sponsored

international financial institution (WB) World Bank
and (IMF) International Monetary Fund . There are
2 types , intergovernmental and private.
WORLD BANK

Is an intergovernmental institution

Its aim is to end extreme poverty and promote
shared prosperity in a sustainable way.
5 ORGANIZATION THAT BELONG TO WB GROUP

The International Bank of Reconstruction and Development

International Development Association
International Financial Corporation
Multilateral Investment Guarantee Agency
International Center for Settlement and Investment Disputes
5 ORGANIZATION CONT…..

These organization facilitate the granting

for loans and financial assistance to
developing countries.
 IN 1960S

Regional development banks were established

(ADB) 1960- ASIAN DEVELOPMENT BANK (AfDB) 1964-
AFRICAN DEVELOPMENT BANK.
These two are intergovernmental financial institution that were
created to spur social progress and economic growth
These 2 anchored on the goal of fostering sustainable development
in their respective countries.
2 PRIVATE INTERNATIONAL FINANCIAL INSTITUTION

Citigroup – Is an American multinational investment banking and

financial corporation.
Merrill Lynch – is the wealth management division of Bank of
America.
Both institutions provide investment around the world. Investment
can be in the form of foreign direct investment, stocks or financial
loans.
GLOBAL MARKET INTEGRATION

It was the result of the establishment of a global economy that

involved the homogenization of trade and commerce.
Example of Homogenization: Diffusion of Hollywood movies
that can be seen all over the world or of the global brands that
people all around the world aspire to possess.
HARVEY 1990

Sees that cities and countries were able to extend

their reach beyond borders and patterns of trade
and technology because of the developments in
shipping and navigation.
INTEGRATION OF GLOBAL MARKET

Started when Big American corporations began to emerge after

the Second World War . Example International Telephone and
Telegraph is noe open in the industry.
Later Japan open Toyota, Nissan and Isuzu
French automobile manufactured Renault automobiles- help
military post war operations.
IWAN 2012

 Identifies the differences among international, multinational, transnational and global

companies
 International companies
 Multinational Companies
 Global Companies
 Transnational Companies
INTERNATIONAL COMPANIES

Are importers and exporters with no investments outside their

home countries.
MULTINATIONAL COMPANIES

 MNCs have investments in other countries but do not have coordinated product
offering in each country.
GLOBAL COMPANIES

Have investments and are

present in many countries.
 TRANSNATIONAL COMPANIES

 Are more complex organizations that have investments in foreign operations, and have a central corporate
facility.
 A transnational company or corporation is an industry that is involved with international transactions and
the production of services and goods. It may also refer to foreign investments and income management in
more than one country. The following are some of the transnational companies in the Philippines:
 Nestlé
 Unilever
 Toyota Motor Corporation
CAROLL 2003

Termed the emergence of international,

multinational, global and transnational companies
as the major economies of the world.
GEREFFI 2001

Identifies 3 structural periods in the existence of global

corporations after the war.
Investment base period 1950-1970
Trade base period 1970-1995
Digital globalization 1995 onwards
The UNCTAD defines FDIs as funding made to
acquire lasting interest in enterprises operating
outside the economy of the investor in which their
purpose is to gain an effective voice in the
management of the enterprises.
NEUBAUER 2014

Identifies 3 attributes of global corporations

1. An agent of desired economic development
2. An economic prominence
3. A very powerful entity than can create a crisis.
IN CONCLUSION

International financial institutions play an

important role in the social and economic
development of transnational nations.
 THE END!!!

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