...November 2006 Abstract This paper documents how productivity varies with globalization modes, based on a firm-level data set covering all manufacturing industries in Japan without any firm-size threshold. Only a small fraction of firms outsource, export, or invest abroad. Foreign outsourcers and exporters tend to be less productive than the firms active in FDI or in multiple globalization modes but more productive than domestic firms. This productivity ordering is robust even when firm size, factor intensity, and/or industry are controlled for. This paper also finds that outsourcers are on average less capital intensive than other globalized firms. © 2007 Elsevier B.V. All rights reserved. Keywords: Foreign outsourcing; Exporting; FDI; Heterogeneity; Firm-level data; Productivity JEL classification: F12; F23; D20; F14 1. Introduction Cross-border business activities in various forms have been facilitated by trade liberalization and the development of information technology. The globalization of firms is by no means universally observed, however. Even within industrialized countries, the vast majority of firms sell all their output to domestic consumers, have no affiliates overseas, and outsource exclusively to domestic suppliers. This paper uses firm-level data to document the extent to which firms engage in global activities and to evaluate how productivity varies with the choice of globalization modes. ⁎ Tel.: +81 45 339 3563; fax: +81 45 339 3574. E-mail address:...
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...Kevin David Silva Caicedo Facultad de Administración, Finanzas y Ciencias Económicas Fragmentos: (The global transformations reader) - “Globalization implies that connection across frontiers are not just occasional or random, but rather are regularized such that there is a detectable intensification, or growing magnitude, of interconnectedness, patterns or interaction and flows which trascend the constituent societes and states of the world order..” Pagina 67, Párrafo 3. R//: Tener una plena comunicación con los entes económicos y eficaces, brinda que los países potencialicen sus mercados y puede crear nichos de mercados que puedan llegar a mercados que sean de difícil acceso, sin importar las limitaciones que este le presente. - “Globalization is not conceived here in opposition to more spatially delimited processes but, on the contrary, as standing in a complex and dynamic relationship wirh them.” Pagina 68, Párrafo 5. R//: La iniciativa de la globalización no busca en que un solo agente comercial se beneficio con el desarrollo de este proceso, y se convierta en una relación poca amena que termine en un conflicto con otro países, por no tener plenamente establecidos los parámetros de que beneficie a todas las partes por igual y brindar una relación dinámica. - “Infrastructures may facilitate or constrain the intensity and intensity of global connectedness in any single domain” Pagina 71, Párrafo 4. R//: Si se establece acuerdos formales que pacten el desarrollo de la...
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...I. GLOBALIZATION: OPPORTUNITIES AND CHALLENGES A. NEW FORCES DRIVING GLOBALIZATION any people consider globalization nothing new – societies have been interconnected for years. But globalization took different forms in the past and the contemporary conjuncture is new.1 The world has never experienced globalization at this level of intensity before or the speed at which it is transforming and integrating societies. There is no single, all-encompassing definition of globalization, notes Sen.2 Instead, it has become a broad heading for a multitude of global interactions, ranging from the expansion of cultural influences across borders to the enlargement of economic and business relations throughout the world. For the economist, globalization is essentially the emergence of a global market. For the historian, it is an epoch dominated by global capitalism. Sociologists see globalization as the celebration of diversity and the convergence of social preferences in matters of lifestyle and social values. To the political scientist, it represents the gradual erosion of State sovereignty. But disciplinespecific studies explain only a part of the phenomenon. From a multidisciplinary angle, globalization may be treated as a phenomenon, a philosophy and a process which affect human beings as profoundly as any previous event.3 Several factors have been responsible for this phenomenon. This study confines its attention to four growthenhancing facets of globalization that have been among its...
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...assignment #1 Globalization is a worldwide trend, which generally refers to various phenomina that have elements such as cutting across national boundaries and resulting in higher intergration or interdependence of human societies. In terms of economic impacts, globalization provides benefits to individual economies by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world. However it also causes risks which tend to even outweigh the benefits. By outlining, some of the benefits of globalization include: * FDI (Foreign Direct Investment): boost technology transfer, industrial restructuring, and growth of global companies * Technological innovation: competition increased from stimulate technology, outputs improved by more efficient processes * Economies of scale: costs and prices reduced And some of the risks of globalization include: * Interdependence: regional or global instabilities from interdependence between nations * National sovereignty: rise of national states, multinational, global firms, and other international organisations * Equity distribution: national or international conflicts from inequalities of benefits The overall picture is that because of the world interconnectedness, what might have been considered to be a local problem can quickly become a global problem. Due to internaltional lending and trading, which has come as the result of globalization, the health...
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...written by internationally acclaimed author Thomas L. Friedman that provides a framework for understanding globalization as an international system. He explains the influence globalization is making on politics, economics, society and religion. Friedman stages the conflict between the Lexus (globalization) and the Olive Tree (the primeval forces of culture, geography, tradition and community). The book explains how to look at globalization today and how it works. Friedman discusses that globalization today is similar to the previous era of globalization and what set today’s globalization apart from the past is the grade and intensity with which the world is being held together into a single globalized marketplace. What is new today is also the quantity of individuals and countries who can take advantage of the globalized economy and information networks. Furthermore, it discusses how nation-states, communities, individuals and the environment interrelate with globalization. Friedman indicates that the system allows farther, faster, deeper and cheaper reach around the world. For example, in the 1990s most people have not even heard about internet and only few people had an email address then but today the Internet, cell phones and emails have become a necessity for people. Whereas globalization has a good effect, Friedman also discussed the undesirable impact globalization. According to him, the most negative would be the increasing income gaps between the haves and the havenots...
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...can’t ignore intercultural businesses and ethical issues to conduct fairly over countries. Unfortunaly, there are so many host companies which don’t care ethical issues but also their profits. How should a global company conduct it’s business ? Globalization has many positive side such as creating outsourcing. For example, the company enjoy the benefit of power cost because of the wages in developing countries. Developing countries get access to the latest technology. In addition, globalization results in increased competition and forces companies to lower prices. Therefore customer has a chance to choose with lots of option. However, there is also negative effects of globalization. Developed countries have outsourced manufacturing and blew and white collar jobs. That means less jobs for their own people. Such as accountants have lost their jobs due to outsourcing to cheaper locations like India. Globalization causes creation of mixed standars of labor in developing countries forcing many workers to work in inhumane conditions.Safety standards are ignored. Increased job competitions results in lower wages for worker(Although this benefits consumers), lower standars of living. The globalization is not balanced to all countries across the globewhich means that the rich is getting richer and the poor is becoming poorer. The bad aspects of foreigh countries are negatively affecting the local cultures. Local industries are being taken over by...
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...to assess the impact of globalization on the Caribbean business environment. Much has been written about globalization which is more accurately viewed as a process of change rather that an event which has already occurred. The impact of globalization on any environment can be both positive and negative and can be described as the enablers or the constraints which affect the decisions made by leaders, both government and business. It also refers to the way these choices affect the lives of all people. Scholars David Held, Anthony McGrew, David Goldblatt and Jonathan Perraton developed a general framework for understanding the process and characteristics of globalization. The authors said that, “in its simplest sense globalization refers to the widening, deepening and speeding up of global interconnectedness. They also suggest that the process of Globalization does not only have one kind of impact or outcome but four different types namely Decisional, Institutional, Distributive and Structural: • Decisional impact. How does globalizing processes affect how individuals, corporations, organizations and governments make decisions? • Institutional impact. How does globalization change the agendas of organizations and individuals, structure their choices and influence their preferences? • Distributive impact. How does globalization change the way wealth and power are distributed within and among countries? • Structural impact. How does globalization structure patterns of behavior...
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...Netflix: Identify and evaluate the impact of the forces that drive change in the movie rental industry on competitive intensity. How are these forces likely to affect the future industry profitability? All industries are affected by new developments and on going trends that alter industry conditions. It is important managers remain alert to such changes most likely to affect the strengths of Porter’s Five Forces (Crafting & Executing Strategy; The Quest for Competitive Advantage, p.77). By pinpointing and understanding the intensity of change driving forces, managers will be able to react in a timely manner, lowering costs and/or influence this change, which allows them to gain competitive advantage. We have identified and focused on the most powerful agents of change altering competitive conditions in the movie rental industry. 1) Increasing Globalization Due to the rising availability of high-speed Internet in many developing countries such as Latin America, streaming movies has increased over the last few years, expanding the consumer market and intensifying competition 2) Changes in an industry’s long-term growth rate The traditional movie rental method (physical DVDs) is on a steep downward trend. There is also an anticipated expansion of content distributors via the Internet increasing demand and rivalry for the Internet based movie-renting industry. Changes include the possibility of content providers digitally distributing their own content. Potential...
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...1. | The operations of multinational managers are made complex given the diverse cultural environments in which they operate. Research Hosfede's findings in any of the BRIC countries relating to the five dimensions of power distance, uncertainty avoidance, individualism, masculinity, and time orientation. How do they compare with those of the United States? What country-specific factors account for the differences? What impacts would they have on your management operations? | | | | | | Geert Hofstede developed the Model of National Culture. This consisted of the five dimensions that speak to cultural values. They include power distance, uncertainty avoidance, individualism, masculinity, and long-term orientation. Comparing Brazil with the United States shows a major difference in how each country chooses to operate in each individual dimension. The United States is ranks lower in the area of Power Distance, significantly higher in Individualism, slightly higher in the dimension of masculinity, significantly lower in uncertainty avoidance, and slightly lower in long-term orientation. Brazil reflects a society that believes more in a hierarchy that should be respected, protecting members in exchange for loyalty, they are both intermediate on masculinity, who show a strong need for rules, while maintaining being able to deal with past and future challenges (Geert-Hofstede, 2015).Some of the country’s background such as the need to show respect to elderly...
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...This essay looks at how globalization in the 21st century di"ers from globalization in the 20th century. Today, according to Manyika et al. (2016, p. 4) from the McKinsey Global Institute, “accelerating 4ows of data and information are changing the dynamics of globalization”. Prior to this, at the very turn of the century, Keohane and Nye (2000) examined their contemporary globalization and identi)ed three changes—not in degree, but in kind—that had emerged in the run-up to the 21st century. Similarly, Stiglitz recalls a “semantic shift from the international to the global” in the 1990’s, with the “creation of a new world order that was truly ‘global’ at the dawn of the twenty-)rst century” (Stiglitz, 2014, p. 474). By exploring these earlier...
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...The Rapid Change of International Business James Taylor 0141 2-9-12 Zale University Dr. Rugger The Rapid Change of International Business 4. Discuss the forces that are leading international firms to globalization of their sourcing, production, and marketing. (a) Political forces has lead to increasing trend toward multilateralism (in which the United Nations plays a key role) and toward the emergence of national and international nongovernmental organizations that act as watchdogs over governments and have increased their activities and influence. Political forces are also setting a trend towards unification and socialization of the global economy (Moghadam, 2010). (b) Technological forces play a fundamental part in making globalization possible. Without airplanes, telephones, satellites, computers and televisions it would not be possible to transfer information from one place to another, thus allowing for the speed and the intensity which characterize the modern world. These technological advances give rise to a rate of diffusion and transfer of knowledge which is greatly superior to that of the past. In other words, it was the new technologies that allowed the emergence of the “global village”. (c) Market forces combines the promotion and selling of goods and services with an increasingly interdependent and integrated global economy. It makes companies feel if they are without walls...
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...1 Intro to strategic management 1. Competitive advantage Derived from the successful formulation and execution of strategies which differ and create more value than competitor strategies Strategic management process The full set of commitments, decisions, and actions required for a firm to create value and earn returns that are higher than those of competitors 2. The Competitive Landscape, The US Airline Industry - An Illustration * De-regulation 1978 * Low-cost, limited route carriers * Terrorist attacks * Volatile economic conditions * Global alliances * High level of consolidation 3. The Competitive Landscape-Major Trends * Globalization * Economic volatility * Rapid technological change 4. Globalization of Markets and Industries * Globalization Increasing economic interdependence among countries as reflected in the flow of goods and services, financial capital, and knowledge across country borders * Hypercompetition Extremely intense rivalry among firms, characterized by escalating and aggressive competitive moves among market challengers * Artificial constraints on business transactions across national boundaries (such as tariffs) have been eliminated. * Restraints on the transfer of resources (such as equipment, capital, raw material, and even employees) across markets have decreased significantly. * The range of competitive opportunities available to firms has greatly increased. * Hypercompetition...
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...Issues in Management Essay Introduction With the rapid development of knowledge, economy and communication technologies, the world economic integration and international division of labor is increasingly deepening. Enterprises, as one of the most important elements in global value chain are facing both opportunities and challenges. Traditionally speaking, medium sized enterprises (SME) are primarily facing towards their home-market (Lindmark, 1998). However, due to the trend of globalization, more small and medium-sized enterprises have already started international expansion (Knight and Cavusgil, 1996). In the process of economic globalization, the competitive advantage depends largely on the enterprise innovation and the ability to enter into the market quickly. This essay will discuss the globalization process of a manufacturing company located in a G7 economy making high quality agricultural equipment and both the positive and negative features of globalization. The globalization process of the company Although internationalization is a common sense in today’s marketing, however, to discuss the internationalization process of enterprise, it is important to define enterprise internationalization itself clearly. Beamish(1990) defined enterprise internationalization as "the process by which firms both increase their awareness of the direct and indirect influence of international transactions on their future, and establish and conduct transactions with other countries...
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...do not pay taxes or incur the costs of regulations. 2. Formal economy: is comprised of commercial activities that a governing body taxes and monitors for society’s benefit and whose outputs are included in a country’s gross domestic product. But the informal economy is also prominent in developed countries such as Finland, Germany, and France (where this economy is estimated to account for 18.3 percent, 16.3 percent, and 15.3 percent, Hitt, Michael A.; Ireland, R. Duane; Hoskisson, Robert E. (2014-01-01). Strategic Management: Concepts and Cases: Competitiveness and Globalization (Page 51). South-Western College Pub. Kindle Edition. the analysis of the general environment allows firms to identify opportunities and threats. Hitt, Michael A.; Ireland, R. Duane; Hoskisson, Robert E. (2014-01-01). Strategic Management: Concepts and Cases: Competitiveness and Globalization (Page 51). South-Western College Pub. Kindle Edition. 3.Industry: is a group of firms producing products that are close substitutes. 4. 5 forces that influence a company’s profitable ability within in an industry: * The threats posed by new entrants * The power of...
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...EFFECTS OF GLOBALIZATION NEGATIVE Globalization has various aspects which affect the world in different ways such as: It gives access to products which are not readily available, to various countries, for example coffee from Kenya to the UK and Netherlands, thus giving developing countries an opportunity to produce and sell goods that in return are able to make a better living. This is, however, debatable. Wealthier countries which purchase these goods make production and trade rules that developing countries must follow. This reduces fair chances in the world market place, meaning developing and some developed countries are losing out and not making as much profit as they probably could. Increased prosperity has gone hand in hand with mass poverty. Already obscene inequalities between rich and poor are widening. (Watkins, 2002) Developed countries outsource many manufacturing jobs that were previously done by their citizens to developing countries like India and China, because labor is significantly cheaper. Outsourcing refers to obtaining goods by contract from outside sources. This is a lose-lose situation, as the people in these developed countries lose out on jobs, while those in developing countries are ridiculously underpaid for their labor, giving rise to the issue of human rights. Working conditions in these working areas are poor, salaries for the workers barely covering their cost of living. Despite outsourcing of industries providing jobs to people in third world...
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