Globalization

BROADLY SPEAKING, the term globalization means the integration of economies and societies through cross-country flows of information, ideas, technologies, goods, services, capital, finance, and people. The essence of globalization is connectivity. Cross-border integration can have several dimensions—cultural, social, political, and economic. The term globalization is used in the more limited sense of economic integration, which can happen through three channels: trade in goods and services, movement of capital, and flow of finance. There is also the channel through movement of people, or migration.

Globalization is defined as a higher stage of internationalization. It can be considered as the predominance of world-market orientation in trade, investment, and other transactions; the special and institutional integration of the markets; and the emergence of global problems, like environmental degradation and population growth, the management of which requires global cooperation.

In the forefront of the globalization process are international money capital and information flows, over which the national legislations have little or no control in the era of liberalization. In order to understand the different opportunities and conflicts claimed to be the consequences of globalization, one can find the analytical disintegration of the process into internationalization, transnationalization, and universalization, which are more relevant and scientific than the use of the globalization concept as an overall intellectual straitjacket.

The historical roots of globalization are in the internationalization process; from the perspectives of countries, internationalization developed in two main directions. The inward direction of the process has been [Page 435]the increase (or penetration) of the external sources of goods, capital, services, technology, and information in the domestic consumption of any given country; the outward direction of the process has been the predominance of world-market-oriented countries and global expansion of firms in trade and investment. Internationalization, in essence, promotes economic progress. It increases the exchange of material and intellectual values and has been beneficial to contacts among peoples.