The Four Stages Of Globalization

Economists typically use the term “ Globalization “ to refer to international integration in commodity , capital and labor markets (Bordo et al., 2003)

Since the mid-19th century , there have been at least two episodes of globalization (Baldwin and Martin, 1999). The first began around the mid-19th century and ended with the commencement of World War I , while the second began in the aftermath of World War II and continues today . Both theses episodes were accompanied with rapid changes in trade and output and changing size of economies . The interplay of various factors like migration, GDP growth and trade and foreign investment help us understand their influences on the changes globalization. ( See Table 1 )

FIRST PHASE

Pre world war 1

Though multinational enterprises existed in the late nineteenth century , they were few and in between that operated at the level we see today . The rise of the multi-national company in manufacturing and services reflects several important economic changes of the past century.

One is the rise of the corporation itself – an organizational form that was still relatively new in the 19th century. Another is the need of all countries for access to the technological know how and markets controlled by big corporations. Yet another is the ability of corporations to exploit modern communications and production technology to organize the chain of production within the firm, but across frontiers. A well-known by-product has been the universal increase in intra-industry trade. The incentive for organizing such chains of production has also been increased by the growth

Technological innovations like highly improved transportation and communications accompanied with significantly reduced costs , the development of the jet engine and use in aviation for the transport of people and goods , investments in infrastructure allowing expansion of cities and accessibility to remote regions . Another extremely important change was the revolution in information technology . Products like the personal computer and mobile phones accompanied by and services like the internet have made access to information vastly cheaper , efficient and easier