An analysis of the above definition and other writings brings out the following features of globalisation from international business viewpoint:
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1. Economic Globalisation involves globalisation of firms, markets and regulation. Global firms are firms which, originating in a specific territory, spread their operations through corporate groups and structures to other territories.
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Markets are where buyers and sellers meet. In global markets, place or space to meet is not restricted. Financial markets are the genuinely global markets. The globalisation of regulation refers to spread of some set of regulatory norms. It is not the same set as there are many differences in the level of rules between the systems.
2. It emphasises a global rather than a national context. It does not mean to deny national settings, but to indicate that they themselves sit within a larger context. “Globalisation (is) the much celebrated unification of puddles, ponds, lakes and seas of villages, provincial, regional and national markets into a single economic ocean.” Thus globalisation relates to integration.
3. Globalisation leads to interdependence. Whatever happens anywhere affects everywhere. Asian financial crisis in late 1990s, sub-prime crisis of 2008 and Debt crisis of 2010 shook the entire world.
4. With regard to scope in economic terms it includes international trade, foreign direct investment and capital market flows.
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5. Globalisation extols the virtues of modern capitalism.
6. Globalisation is a process of degrees. Globalisation refers to ‘intensification of economic, political, social and cultural relations across borders’. It does not mean that unless the whole globe is covered it is not globalisation.
Of course, higher the convergence, stronger the globalisation. A cross-country ranking for globalisation has put Ireland at No. l, the US at No. 12, India at No.49, and Iran at No.62.
7. The underlying principle of globalisation is competition. As globalisation took hold, competition got tougher.
