Professional Documents
Culture Documents
Globalization
Mauro F. Guilln
Mini-Lecture 1.1
Whats this class about?
Manifestations of globalization.
Whats the global economy?
Welcome to
Analyzing Global Trends!
Global trends and their effects on:
Consumer markets.
Labor markets.
Financial markets.
Politics.
Geopolitics.
Natural resources.
Global relationships.
Im Mauro Guilln
Professor at the Wharton School.
Director of the Lauder Institute at the
University of Pennsylvania.
I am originally from Spain.
I have a passion: analyzing global trends.
Ive written 10 books and myriad articles on
various aspects of globalization.
Trends
Global trends affect regions,
countries, industries, and even
firms in heterogeneous ways.
They are tornadoes, not tsunamis.
Trends entail both challenges and
opportunities.
Uncertainty will be a key feature of
the 21st century: the new normal.
Whats needed?
New programs, new products?
New mindset?
Some answers
More people live in cities than in the
countryside since 2009.
There are more people suffering from
obesity than from hunger since about 2010.
The largest consumer markets are in Europe
and the U.S. today, but within 20 years they
will be in India and China.
There are more failed states than
dictatorships since the late 1980s.
Manifestations of Globalization
Increased cross-border activity.
Supra-national organizations and forums.
Attempts at supra-national political
organization.
Spread of ideas and practices.
Awareness.
Why so Fascinating?
Because it puts two kinds of liberalism on a
collision course:
Liberalism of the market, which is boundarytransgressing. The division of labor is limited
by the extent of the market.
Liberalism of citizenship, which seeks to
establish and maintain boundaries. Relationship
between an individual and a state, with
associated individual rights and obligations.
Mini-Lecture 1.2
Can we measure globalization?
Basic definitions and conventions.
Making projections into the future.
1980
1985
1990
1995
2000
2005
2010
38.4
39.5
32.8
37.8
39.1
31.2
38.0
38.0
38.1
41.8
40.9
46.4
48.8
48.1
52.5
53.7
52.0
62.0
56.0
55.9
56.7
6.5
4.9
11.8
8.3
6.5
14.7
9.4
8.9
13.6
11.3
10.8
16.4
23.1
22.7
40.1
25.2
25.3
50.2
29.7
30.7
60.3
31.7
13.1
32.7
9.6
32.7
7.0
33.0
9.2
32.9
34.2
11.0
37.1
38.5
11.5
51.9
45.2
17.8
66.6
B. Financial:
Daily currency exchange turnover, % world GDP a
Cross-border banking external assets, % world GDP b
Cross-border bank loan & deposit stock, % world GDP b
0.7
13.7
13.9
1.3
19.9
19.9
3.8
28.1
34.3
5.6
28.5
33.1
6.8
34.2
37.6
4.6 k
54.0
39.1
6.3
47.9
34.9
C. Internet:
Users, % world population:
Developed countries, % population
Emerging & Developing countries, % population
0.1
0.3
0.0
0.8
3.7
0.0
6.7
30.5
1.5
16.0
59.4
7.3
30.2
73.4
21.5
D. Demographic:
Stock of international migrants, % world population
Refugee population, % world population
Workers remittances, % of world GDP
2.2
0.41
2.3
0.39
3.0
0.42
2.9
0.3
0.36
2.9
0.2
0.43
3.0
0.1
0.63
3.1
0.2
0.75m
154
159
159
185
189
191
192
337i
4265 i
378
4676
300 j
4621 j
243
6357
244
7412
253
8198
3.5
577
6.7
1107
8.6
2152
9.5
4853
11.4
10525
13.0
22405
13.7
38440
E. Political:
Nation-states with membership in the United Nations
International organizations, number:
Intergovernmental
Non-governmental
F. Social & Cultural
International tourist arrivals, % world population
Books on the topic of globalization e
Notes: Data not available. a Data are for 1979, 1984, 1989, 1995, 1998 and 2004. b Data
are for 1981, 1986, 1991, 1995, 2000, and 2006. d Excludes international calls using cellular
phones or private networks. e Books with the subject or title keywords global or
globalization, published in any language until each year, as searched on August 20, 2010. f
1991. g 2002. h 1998. i 1981. j 1989. k 2004. l 2007. m 2009.
Sources: World Development Indicators; World Investment Report; Bank for International
Settlements; United Nations; International Monetary Fund; International Telecommunication
Union, Key Global Telecom Indicators; Yearbook of International Organizations; Bowkers
Global Books in Print.
For background information, see Mauro F. Guilln, Is Globalization Civilizing, Destructive
or Feeble? A Critique of Five Key Debates in the Social-Science Literature. Annual Review
of Sociology 27 (2001):235-260.
Compiled by Mauro F. Guilln, The Wharton School of the University of Pennsylvania,
guillen@wharton.upenn.edu
Index 2010
(1980=100)
146
457
900
192
141
International tourism
391
6662
Submarine Cables
Definitions
Gross Domestic Product:
The total value of goods and services produced
in an economy during a given year.
Households.
Firms.
Financial institutions.
Government.
Large Numbers
In the United States:
1 billion = 1,000,000,000
1 trillion = 1,000,000,000,000
Source of the data: United Nations Population Division, World Population Prospects: The 2012 Revision.
Discussion Question
Which of the four projections do you
believe is least likely?
Mini-Lecture 1.3
International trade.
Foreign investment.
Multinational firms.
International Trade
Cross-border flows of goods &
services.
Why does it take place? Theory of
comparative advantage.
Free trade may be good overall, but
it does generate winners & losers.
Absolute Advantage
Adam Smith (1776)
If a foreign country can supply us with a
commodity cheaper than we ourselves can
make it, better buy it of them with some part
of the produce of our own industry, employed
in a way in which we have some advantage.
Relative Advantage
David Ricardo (1819)
Unit Labor Costs
Britain
Portugal
Cloth Wine
100
110
90
80
Other Considerations
Transportation costs.
Other costs of trade.
Scale economies.
Product differentiation.
1980
1985
1990
1995
2000
2005
2010
38.4
39.5
32.8
37.8
39.1
31.2
38.0
38.0
38.1
41.8
40.9
46.4
48.8
48.1
52.5
53.7
52.0
62.0
56.0
55.9
56.7
6.5
4.9
11.8
8.3
6.5
14.7
9.4
8.9
13.6
11.3
10.8
16.4
23.1
22.7
40.1
25.2
25.3
50.2
29.7
30.7
60.3
31.7
13.1
32.7
9.6
32.7
7.0
33.0
9.2
32.9
34.2
11.0
37.1
38.5
11.5
51.9
45.2
17.8
66.6
B. Financial:
Daily currency exchange turnover, % world GDP a
Cross-border banking external assets, % world GDP b
Cross-border bank loan & deposit stock, % world GDP b
0.7
13.7
13.9
1.3
19.9
19.9
3.8
28.1
34.3
5.6
28.5
33.1
6.8
34.2
37.6
4.6 k
54.0
39.1
6.3
47.9
34.9
C. Internet:
Users, % world population:
Developed countries, % population
Emerging & Developing countries, % population
0.1
0.3
0.0
0.8
3.7
0.0
6.7
30.5
1.5
16.0
59.4
7.3
30.2
73.4
21.5
D. Demographic:
Stock of international migrants, % world population
Refugee population, % world population
Workers remittances, % of world GDP
2.2
0.41
2.3
0.39
3.0
0.42
2.9
0.3
0.36
2.9
0.2
0.43
3.0
0.1
0.63
3.1
0.2
0.75m
154
159
159
185
189
191
192
337i
4265 i
378
4676
300 j
4621 j
243
6357
244
7412
253
8198
3.5
577
6.7
1107
8.6
2152
9.5
4853
11.4
10525
13.0
22405
13.7
38440
E. Political:
Nation-states with membership in the United Nations
International organizations, number:
Intergovernmental
Non-governmental
F. Social & Cultural
International tourist arrivals, % world population
Books on the topic of globalization e
Discussion Questions
Which do you think is the country whose
firms have invested the most abroad right
up to the present time?
And the country ranked in second place?
$ billion
Country
% of GDP
1990
2012
1.1
6.3
15.5
509.1
18.4
47.5
0.0
6.4
21.2
148.4
0.9
17.0
1.7
39.7
China
Hong Kong
Taiwan
India
Singapore
South Korea
Malaysia
4.5
11.9
30.4
0.1
7.8
2.3
0.8
2012
509.0
1,309.8
226.1
118.2
401.4
196.4
120.4
Argentina
Brazil
Chile
Colombia
Mexico
Panama
Peru
Venezuela
6.1
41.0
0.2
0.4
2.7
3.9
0.1
1.2
32.9
232.8
97.1
31.6
137.7
37.7
4.0
20.9
4.3
9.4
0.5
1.0
1.0
73.4
0.4
2.6
6.9
10.3
36.5
8.6
11.7
106.5
2.0
5.5
413.2
20.9
Turkey
UAE
Egypt
South Africa
1.2
0.1
0.2
15.0
30.5
60.3
6.3
82.4
0.6
0.0
0.4
13.4
3.9
17.1
2.5
21.1
Ireland
Spain
14.9
15.7
357.6
627.2
31.2
3.0
170.5
46.4
731.8
112.4
151.6
60.2
106.9
229.3
201.4
5,191.2
1,496.8
1,547.2
565.1
975.6
1,808.2
1,054.9
12.6
9.0
8.8
5.3
35.9
23.1
6.7
33.1
57.3
45.6
28.1
126.3
74.3
17.8
1948.6
145.2
2086.8
18,672.6
4,459.4
23,592.7
11.1
4.1
9.9
43.3
17.5
33.1
Russia
USA
France
Germany
Italy
Holland
United Kingdom
Japan
Developed countries
Emerging and developing countries
World total
1990
Stocks of
Foreign
Direct
Investment
Source: World
Investment Report
(2013).
Firm
Country
Industry
Arcor
Argentina
Confectionery
#1 candy manufacturer
Bimbo
Mexico
Food processing
#1 in bread
JBS
Brazil
Food processing
#1 in meat
Modelo
Mexico
Beverages
Vale
Brazil
Mining
#3
Tenaris
Argentina
Steel
#1 in seamless tubes
Bharat Forge
India
Metals
#2 in forgings
Cemex
Mexico
Cement
#1 in ready-mix concrete
Haier
China
Household appliances
#1 in white goods
Braskem
Brazil
Bioplastics
#1
BYD
China
Batteries
#1 in Ni-Cd batteries
Acer
Taiwan
Personal computers
#2
Lenovo
China
Personal computers
#4
Samsung Electronics
S Korea
Consumer electronics
Embraer
Brazil
Aircraft
#1 in regional jets
Cosan
Brazil
Energy
#1 in biofuels
Tata Communications
India
Telecom operator
Mini-Lecture 1.4
Financial globalization.
Financial interconnectedness.
Globalization Indicators
Indicators:
A. Economic:
Exports + imports of goods & services, % world GDP
Developed countries, % GDP
Emerging & Developing countries, % GDP
1980
1985
1990
1995
2000
2005
2010
38.4
39.5
32.8
37.8
39.1
31.2
38.0
38.0
38.1
41.8
40.9
46.4
48.8
48.1
52.5
53.7
52.0
62.0
56.0
55.9
56.7
6.5
4.9
11.8
8.3
6.5
14.7
9.4
8.9
13.6
11.3
10.8
16.4
23.1
22.7
40.1
25.2
25.3
50.2
29.7
30.7
60.3
31.7
13.1
32.7
9.6
32.7
7.0
33.0
9.2
32.9
34.2
11.0
37.1
38.5
11.5
51.9
45.2
17.8
66.6
B. Financial:
Daily currency exchange turnover, % world GDP a
Cross-border banking external assets, % world GDP b
Cross-border bank loan & deposit stock, % world GDP b
0.7
13.7
13.9
1.3
19.9
19.9
3.8
28.1
34.3
5.6
28.5
33.1
6.8
34.2
37.6
4.6 k
54.0
39.1
6.3
47.9
34.9
C. Internet:
Users, % world population:
Developed countries, % population
Emerging & Developing countries, % population
0.1
0.3
0.0
0.8
3.7
0.0
6.7
30.5
1.5
16.0
59.4
7.3
30.2
73.4
21.5
D. Demographic:
Stock of international migrants, % world population
Refugee population, % world population
Workers remittances, % of world GDP
2.2
0.41
2.3
0.39
3.0
0.42
2.9
0.3
0.36
2.9
0.2
0.43
3.0
0.1
0.63
3.1
0.2
0.75m
154
159
159
185
189
191
192
337i
4265 i
378
4676
300 j
4621 j
243
6357
244
7412
253
8198
3.5
577
6.7
1107
8.6
2152
9.5
4853
11.4
10525
13.0
22405
13.7
38440
E. Political:
Nation-states with membership in the United Nations
International organizations, number:
Intergovernmental
Non-governmental
F. Social & Cultural
International tourist arrivals, % world population
Books on the topic of globalization e
Financial
Interconnectedness
http://www.imf.org/external/np/pp/eng/2010/100410.pdf
Source: Figure 2.2 in Guillen and Ontiveros, Global Turning Points (Cambridge Univ Press, 2012).
Mini-Lecture 1.5
Globalization and the concept of
isomorphism.
Drivers of globalization.
Isomorphism
Is the tendency of actors, organizations or
other types of entities to become more
similar or to adopt common patterns of
behavior over time.
Isomorphism can result from several
dynamics, which we shall call drivers.
Examples of Isomorphism
Drivers of Globalization:
Isomorphic Pressures
Driver:
Mechanism:
Examples:
Normative
Coercive
Power, dependency
Hegemonic states,
multilateral organizations,
multinational firms
Mimetic
Frequency-based imitation to
cope with uncertainty and/or
secure legitimacy
Bandwagons, fads,
fashions
Emulative
Competitive Performance
Markets
Boundary Conditions
Certain countries are more exposed to
isomorphic pressures:
Dependent states.
States more embedded in trade.
Democratic states.
States with smaller levels of public spending.
Mini-Lecture 1.6
The paradoxes of globalization.
Three Paradoxes
Paradox of predictability:
The global system is highly structured and predictable.
It is also prone to unpredictable disruptions, crises, and even
systemic breakdown.
Paradox of coupling:
Tight coupling among system components, especially
financially, economically, environmentally, and
demographically.
There is increasing institutional decoupling between adoption
dynamics and outcomes.
Mini-Lecture 1.7
The consequences of globalization.
Winners and losers.
Effects of Globalization
Civilizing.
Destructive.
Feeble.
Discussion Questions
Is there more or less inequality in the world
today compared to, say, 10, 20 or 30 years
ago?
Is globalization responsible for changes in
inequality?
Gini coefficients measured vertically. Mauro F. Guilln. Source: World Development Indicators.
Mauro F. Guilln. Data Source: All the Ginis Dataset, World Bank.
Mauro F. Guilln. Data Source: All the Ginis Dataset, World Bank.
Capital.
Educated workers.
Strong states.
Economy ministry.
Rich countries.
Labor.
Unskilled workers.
Weak states.
Labor & social ministry.
Poor countries.
Mini-Lecture 1.8
Tensions and institutions.
Systemic global disruptions.
Key Tensions
They occur at the border between the four
key subcomponents:
Key Institutions
Labor market.
Political representation system.
The state.
The international system of states.