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Market integration
process by which economies are becoming more interdependent and interconnected in terms of commodity flows including externalities and spillover of impacts
International Financial Institutions or IFIs
institutions that provide support through loans or grants and technical advices to promote a country's economic and social development
Corporations
private institutions that produce or manufacture goods, products, and services for a more expanded market usually at the reach of regions or the world.
Transnational corporations (TNCs)
have a more complex setting where each foreign subsidiary is given some freedom to develop its own product lines and marketing
Multinational corporations (MNCs)
have more of a home or country base taking care of the R&D and marketing, and focus more on exporting their products and services
Philippines
has 851 BPO companies, more than half of which are call centers (429).
Philippines
the call center capital of the world, accounting to 18 percent of the global market share
Horizontal integration
happens when a firm gains control of other firms performing similar marketing functions at the same level in the marketing sequence.
Pixar
bought by Disney, which is also in the entertainment media, for $7.4 billion
Example of a local market integration
Landbank of the Philippines acquired the Philippine Postal Savings Bank, for the latter to focus on overseas Filipino worker clients.
Vertical integration
happens when one company owns the operations and products from one stage to the other along the supply chain
Example of vertical integration
an iron mining company operates the steel manufacturing firm
Example of vertical integration
McDonald's owns the land where its supplies are located to avoid cost of lease
International Financial Institutions or IFIs
are institutions that provide support through loans or grants and technical advices to promote a country's economic and social development
Global and regional IFIs
include International Monetary Fund (IMF) and multilateral development banks (MDBs) like the World Bank Group, the African Development Bank (ADB), the inter-American Development Bank, and the European Bank for Reconstruction and Development
IFI
provides financial and technical services and products not for profit but for overall economic and social development
IFI
also works with the private sector for investment and policy reforms to promote private sector expansion
Four key issues with IFIs
legitimacy
effectiveness
support conditionality and financial capacity
sustainability
Paris Declaration on Aid Effectiveness
focuses on the harmonization, alignment, and managing aid for results including monitoring systems and indicators
16th-18th century
the modern capitalist world economy was flourished
First period of globalization
The start of the modern global trade leading to 1914
First period of globalization
This is when trade, capital, and immigration flows grew tremendously and in large volume, but the global institutional architecture to manage these were quite limited
International convention and treaties also served as drivers for these large-scale global movements
International Telegraph Union in 1865
Universal Postal Union in 1874
International Association of Railway Congresses (1884)
International Sanitary Convention in 1892
The Second World War to the late 1990s
the modern international economic enabling architecture was established
The Second World War to the late 1990s
the expansion of MNCs across the globe, supported by enabling policies and improved communications and transport
Trade liberalization and free flow of capital in the world
resulted from political changes like the fall of the Berlin Wall, establishment of regional networks, and trade agreements
1994/95 Mexico crisis
When Mexico's multi-billion loan from IMF created a negative spillover effect on US, Europe, Portugal, and Spain
From the late 1990s until very recently
Third wave of market integration
Third wave of market integration
The advent of the modern Internet
The WTO establishment
Formal entry of China into the trading system through its accession to international financial institutions
Global corporations
One of the major players in globalization and the modern capitalist market
Modern global corporations
Commonly referred to as multinational corporations and transnational corporations
IFIs and global corporations
Play a significant role in global wealth creation and distribution, including global economic development
Trends that complicates the significant growth of IFIs and global corporation
Global inequality
Systematic stability and viability of the global financial system and climate issues
Issues on human security