INTRODUCTION
The
International Monetary Fund defines globalization as the “growing economic
interdependence of countries worldwide through the increasing volume and
variety of cross-border transactions in goods and services and of international
capital flows, and also through the more rapid and widespread diffusion of
technology.” Globalization is about the flow of goods, services, and money
across borders. Globalization is made possible by the increasing spread of
market economies and is facilitated by the rapid spread of technology.
How
much globalization is there? The statistics are staggering. Whereas only 7,000
companies had operations in more than one country in 1970, by 1998, more than
54,000 companies were operating in more than one country and on average were
operating in a far larger number of countries. Those companies had spent $44
billion in foreign direct investment (FDI, as it is called) in 1970—the amount
that companies spend to build or buy operations in another country. By 1998,
their spending had leapt to $644 billion and by 2000, over $1 trillion. (FDI,
it is important to note, does not include portfolio investments—the purchase of
stocks in publicly traded companies.) The cross border flow of goods and
services boomed as well. World trade totaled $311 billion in 1950. By 1998, it
had reached $5.4 trillion. (Zonis, 2001)
No comments:
Post a Comment