The Growth Of Mncs And The Liberalization Of Capital

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Globalization
Definition
Is the process of international integration through which countries interchange culture, world views, products and ideas. (Albrow, Martin and Elizabeth King, 1990)
Foundation
Collapse of communism and the soviet union
Decline in barriers to the free flow of goods, services and capital that has occurred since the end of world war 2
Technological advance (computers, telecommunication and transport)
Migration
Two factors which greatly influenced globalization was the growth of MNC’s and the Liberalization of capital.
Liberlization of capital
Too many players in the international market of finance.
Such as investors and organisations.
Causing large scale instability in currencies, prices and stocks and shares (strange 1998)
Multinationals
They have trans nationalized their production and distribution. i.e they will produce a good in one country and store in another and trade it in a developed one.
They are big contributer to FDI in manufacturing and services industries in developing countries
They account for 75% of world trade in manufacturing in developing countries (Baker et al 1998)
Due to these reasons one of the problems of globalization arises and that is the loss of government control over regulations. Because MNC’s are important in terms of investment, employment and economic growth this means that nation states are dependent on them. If you take into account their mobility to move to where labour is cheapest means that they can force developing nations into policies that benefit them.
As Lindblom (1977) stated large companies can have a major impact not only in peoples lives but also on taxation, employment and industrial policies of nation states as they compete to attract investment.
What it has caused
New world institutions to be formed such as WTO, G8, World Bank and ECB
Changes in culture due to MNC propaganda, internet, westernization and
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