Geography
Economic Impact of Globalisation
The economic impact of globalization refers to the effects of increased interconnectedness and interdependence of economies on a global scale. This includes the flow of goods, services, capital, and technology across borders, leading to both opportunities and challenges for different regions and industries. It can influence employment patterns, income distribution, and the overall economic development of countries.
Written by Perlego with AI-assistance
Related key terms
1 of 5
8 Key excerpts on "Economic Impact of Globalisation"
eBook - PDF- Ashley Kent(Author)
- 2000(Publication Date)
- SAGE Publications Ltd(Publisher)
On the one hand we have states: institutions which set the rules or govern the activities which take place, and the people who live, in a particular territory with fixed borders. On the other hand we have markets: institutions which facilitate the process of exchange between producers and consumers, exchange which pays little attention to borders and will happily cross them. There is therefore a mismatch of scales. States are relatively fixed at the national scale, while markets more easily transcend borders. It is this mismatch or spatial tension which I would argue drives processes of globalisation. Or, at least, this is one useful way of looking at it. Geopolitics is about boundaries, identities and territories; geoeconomics is about flows and exchanges; geopolitical economy is about flows and exchanges which take place over, and in turn reshape, a landscape of borders and places. Through investigating this reshaping of the regulatory landscape we can begin to understand and explain – and perhaps even shape in fairer and more sustainable directions – processes of globalisation. Geographers working from a geopolitical economy perspective have sought to examine processes of globalisation in terms of their geographies, employing, and further developing, ideas about scales and scaling, places and placing, territories and territoriality, borders and border-crossing, and landscapes and landscaping (Agnew and Corbridge, 1995). Financial globalisation Early research into the geopolitical economy of globalisation frequently concerned the paradigmatic case of international finance. Financial globalisation involves financial flows which cross borders and reshape the regulatory landscape, altering the identity of places. One area of geographical research into processes of financial globalisation looks at what are called global cities – places such as London, New York and Tokyo.
eBook - PDFRegional Integration in East Asia
From the Viewpoint of Spatial Economics
- Masahisa Fujita(Author)
- 2007(Publication Date)
- Palgrave Macmillan(Publisher)
(The figure was composed by D. Hiratsuka at IDE-JETRO.) These three figures together indicate that, over the past half-century, global economic activity (in terms of the size of GDP) has been increas- ingly intensifying and converging within and around each of the three regions (i.e., East Asia, EU and NAFTA), while strengthening the eco- nomic interdependency within each region. In particular, it is surpris- ing that, unlike the EU and NAFTA, East Asia has attained such a high level of economic integration mainly through market mechanisms, with little support from region-wide political institutions. Common sense indicates that lower transport costs would make geo- graphical accessibility or distance less important, leading to a more even distribution of economic activity in the world. As we have seen above, however, the reality is almost the contrary. More accurately, the reduc- tion of transport costs over the past half-century has resulted in the rela- tive concentration of the world GDP upon the three regions, while the economic interdependency within each region is becoming stronger. In this book, we attempt to understand this paradoxical phenomenon by using the recently developed discipline of spatial economics. More gener- ally, the purpose of this book is to try to understand from the standpoint of spatial economics the recent dynamism of the global economy, with particular focus on East Asia. In addition, we will examine the prospects of regional integration in East Asia and its essential role and tasks in the future. We now proceed to clarify the meaning of spatial economics. Spatial economics – an introduction In this section, we give a brief history of the development of spatial eco- nomics as well as its basic framework. Spatial economics is often called the new economic geography.
eBook - PDF- Andrew Leyshon, Roger Lee, Linda McDowell, Peter Sunley, Andrew Leyshon, Roger Lee, Linda McDowell, Peter Sunley, SAGE Publications Ltd(Authors)
- 2011(Publication Date)
- SAGE Publications Ltd(Publisher)
Accordingly, Hodder and Lee’s text Economic Geography made the astute observation that ‘[n]one of the THE LOCAL IN THE GLOBAL 123 individual elements is taken to have any meaning outside the context of the economy to which it belongs’ (1974: 13). This localized approach to ‘the local’ – devoid of many external connections – is evident, obvious and completely deliberate when one considers the topics of discussion outlined in the classic text Location in Space by Lloyd and Dicken (1972). Having delimited the economy as box-like relations between pro-duction, distribution, circulation, consump-tion, allocation and regulation, the chapters in the book focus on spatial organization, transport costs, and variations in production costs and demand. It then progresses to ana-lyse how all this can be modelled in different ways to get an understanding of the geo-graphical constitution of the space-economy as a series of spatial clusters (with the eco-nomic geographer being concerned with the spatial organization of economic systems ). Such clusters are seen to result from the formation of groupings of activity, which in turn require attention to processes of agglomeration. Building on the work of Weber and Lösch, ‘localized economies of scale’ are delimited by drawing attention to key interaction effects among costs, scales of activity, and demand, etc. In turn, local eco-nomic landscapes evolve over time and across space through triggers to development (key industries or investment decisions), multi-plier effects and cumulative growth regimes, emanating often from resource-based econo-mies and their interconnected industrial activities repeatedly reinforcing each other. This geographical economics went hand-in-hand, first time around (see Chapter 3), with how state policy-makers and practitioners dealt with economic stimuli and internal growth dynamics, and also began to deal with the limits to endogenous resource-based economic devel-opment.
eBook - PDF- Partha Gangopadhyay, Manas Chatterji(Authors)
- 2017(Publication Date)
- Routledge(Publisher)
Such a one-dimensional approach is not reasonable, because it does not reflect the spatial dimension. An increasing reliance on trade of all countries could just be an expansion of each country’s trade relation with the nearest neighbour without any expansion of the spatial coverage. The analysis of globalisation should thus be reflected in measures that ideally would measure quantitative as well as spatial degree of expansion. Furthermore, globalisation has implied increasing interdependency between increasingly distant nations and regions in many respects. It is also clear from the historical evidence that globalisation has been progressing in overlapping stages with an acceleration during the 1980s and 1990s. Trading Capitalism Certain aspects of globalisation can be traced back to the era of European trade capitalism. While powerful empires had controlled distant territories in earlier periods, economic activities remained local and the relationship between the political centre and outlying territories was one of unidirectional domination. Our understanding of globalisation requires substantial reciprocity, competition, and decentralisation of economic power. Only then is a self-reinforcing accumulation of interdependent networking feasible. These preconditions were not present in the Roman Empire, nor were they present in the early Asian civilisations. In medieval Europe, political fragmentation was the rule. Not only was there a separation between ecclesiastical and secular power, but secular power was further divided between local feudal lords with jurisdiction over relatively small territories. It thus became possible for small and comparatively independent towns to form in the cracks between the fiefdoms, often in conjunction with the building of a cathedral or monastery.
eBook - PDF- David Greenaway, R. Falvey, U. Kreickemeier, Daniel Bernhofen, David Greenaway, R. Falvey, U. Kreickemeier, Daniel Bernhofen(Authors)
- 2016(Publication Date)
- Palgrave Macmillan(Publisher)
Economic Geography Literature 509 those in which one might intuitively expect the strongest forces of cumulative causation (e.g. manufacture of cutlery in the United Kingdom). These findings highlight the fact that geographical concentration can arise as a result of geo- graphic variation in natural advantages (e.g. mineral resources) as well as forces of cumulative causation. Indeed, Ellison and Glaeser (1997) develop an obser- vational equivalence result that the relationship between mean measured levels of concentration and industry characteristics is the same regardless of whether concentration is the result of spillovers, natural advantage or a combination of the two. This, in turn, is related to the general identification problem in the social sciences of distinguishing spillovers from correlated individual effects (see in particular Manski, 1995). 3.2 Market access and wages As discussed above, one of the key theoretical predictions of new economic geography models is that nominal factor prices vary systematically across loca- tions with their market access. This prediction relates to an older literature that relates spatial variation in economic activity to measures of ‘market potential’, defined as the distance-weighted sum of market demand: MP i = j ( d ij ) γ Y j , (8) where MP i is the ‘market potential’ of location i, d ij is the bilateral distance between locations i and j, and γ is a distance-weighting parameter, traditionally set at −1. 15 New economic geography models can be viewed as providing microeconomic foundations for empirical measures of market potential. Consider for example the right-hand side of the wage equation (1). Suppose that the impact of trans- portation costs on market demand, τ 1−σ , is proxied by the inverse of bilateral distance, as suggested by gravity equation estimates in which the coefficient on bilateral distance is close to minus one.
eBook - PDFThe Great Convergence
Information Technology and the New Globalization
- Richard Baldwin(Author)
- 2016(Publication Date)
- Belknap Press(Publisher)
It is important to recognize two things about the pains of global- ization. First, there is no gain from globalization without pain. Second, the solution to this dilemma is to establish a “social contract” that gives all citizens a stake in the gains and a share of the pains. 186 Understanding Globalization’s Changes The New Economic Geography The second package of economic logic, the New Economic Geography—known affectionately as NEG by aficionados—explains the riddle of uneven spatial development, which, simply put, is: How can lower trade cost—which should make distance matter less— produce such dramatically unbalanced distributions of economic activity such as cities, and the G7’s outsize share of world gross do- mestic product (GDP)? The NEG cracks the riddle by focusing on firms’ location deci- sions. According to what might be called “NEG-ative reasoning,” these decisions rest on the balance of two collections of opposing forces: • Dispersion forces that favor geographic dispersion of economic activity • Agglomeration forces that favor geographic clustering of economic activity The balance between them determines why, for instance, a very large fraction of British firms locate in Greater London, but not all of them do. Or why the share of global economic activity in the G7 rose to two-thirds in 1990, but no higher. Dispersion and Agglomeration Forces There are many dispersion forces, but most operate on only a very local scale (like urban congestion or high rents). These are not rele- vant to the global facts. NEG concentrates on two dispersion forces that operate through goods prices and thus can operate at the global spatial level via trade in goods. These dispersion forces are wage gaps and local competition. More specifically, the location of manufacturing is affected by wage gaps for high-skill workers and wage gaps for low-skill workers. For instance, high-education labor is relatively more abundant than
eBook - PDF- D. Das(Author)
- 2003(Publication Date)
- Palgrave Macmillan(Publisher)
The final result of heightened competition is improved systemic efficiency. Here we are taking the normal definition of efficiency, that is, producing more with the given resources or producing the same quantum with fewer resources. As globalization is essentially driven by structural changes and technological developments, transaction costs in the glob- alizing economies have tended to reduce. In the integrating economies, exposure of private agents to global competition has increased. Therefore, efficiency level in both the goods and factor markets has been affected favorably. Citrin and Fischer (2000) have decomposed the effects of globalization- driven competition into microeconomic and macroeconomic levels. At the microeconomic level, as global integration affects both goods and factor markets, it leads to lower price mark-ups in the goods sector, lower excess wages in the labor markets and less expensive capital due to movement of capital from the capital abundant economies to the capi- tal scare economics. Unwarranted price mark-ups are in general unsus- tainable. They become more unsustainable in a globalized world economy. So do the wage hikes that are not supported by productivity 80 The Economic Dimensions of Globalization increases. Thus, global integration nurtures discipline in the market- place as well as promotes it in the place of production. The microeco- nomic impact of enhanced competition and market discipline is a one-time price decline. At the macroeconomic level, as new economies enter the global mar- ket scene the market competition become keener. When the four Asian newly industrialized economies (NIEs) 12 broke into the global market place in the late 1970s and the early 1980s, the OECD Secretariat com- missioned a study to delve into the effect of their entry on the erstwhile industrial economies.
eBook - PDF- Trevor J. Barnes, Jamie Peck, Eric Sheppard, Adam Tickell, Trevor J. Barnes, Jamie Peck, Eric Sheppard, Adam Tickell, Trevor J. Barnes, Trevor J. Barnes, Jamie Peck, Eric Sheppard, Adam Tickell(Authors)
- 2008(Publication Date)
- Wiley-Blackwell(Publisher)
On the other hand, while it cor-rectly suggests interdependence-through-spillover as key to many of the most impor-tant forms of innovation, it does not say why such spillovers should be localized within a national economy, except for security reasons. There is no economic rea-soning about the territorialization of such spillovers, in other words. So the debate over “who is us?” tells us little about who we really are in a global economy. Commodity trade The growth of commodity trade figures prominently in claims that the economy is globalizing. Rising intra-industry trade is said to be evidence of globalization as firms create a global functional division of labor. One possibility is that intra-industry trade is accompanied by the advent of global oligopolistic supply structures for many commodities and for knowledge inputs (Ernst, 1990). The big firms who dominate these supply chains benefit from entry barriers due to scale and TERRITORIES , FLOWS , AND HIERARCHIES IN THE GLOBAL ECONOMY 273 the firm-specific assets they deploy on a global scale. This argument, however, says nothing about the problem of territorialization per se . Global supply structures, even highly oligopolistic ones, could reflect (1) an internalized supply structure of assets, in which case it could be considered deterritorialized (Dicken, 1992a); or (2) an attempt by firms to optimize access to factors of production in order to produce the inputs to their global supply structures (Reich, 1990), another form of deterritori-alization, in the sense that regions and nations must simply make themselves attrac-tive to mobile investments; or (3) also an attempt by firms to optimize access to territorialized factors of production (which meet the criteria of our definition). The point is that without a conceptual apparatus specific to the problem, the existing evidence can be made to reveal little about it.
Index pages curate the most relevant extracts from our library of academic textbooks. They’ve been created using an in-house natural language model (NLM), each adding context and meaning to key research topics.
