Industrial Location and Global Enterprises (Other (Not Listed) Sample)

Industrial Location and Global Enterprises Midterm Exam Student’s Name Affiliation Course Number and Name Instructor Due Date Midterm Exam Question 1: Critically explain the concept of “Globalization.” In your answer, you must draw on three relevant theories of globalization and use illustrations/examples. Globalization refers to the extensive network of economic, social, political, and cultural interconnections and processes which goes beyond national boundaries (Yalcin, 2018). It is the integration of economies and societies all over the world. As Kinsella et al. (2012) assert, globalization is the "inexorable integration of markets, nation-states, and technologies to a degree never witnessed before in a way that is enabling individuals, corporations, and nation-states to reach around the world farther, faster, deeper, and cheaper than ever before.” Globalization is the expansion of economic activities across the political boundaries of nations. It is characterized by enhanced economic integration and interdependence among nations in the world economy (Das, 2004). Economic integration can be negative or positive: negative integration refers to the breaking down of trade or protective barriers such as tariffs and quotas, while positive integration aims at standardizing international economic laws and policies (Jain, n.d.). Globalization is associated with an increasing cross-border movement of goods, services, technology, capital, people, and information and the organization of economic activities beyond national boundaries. The main elements of the “globalized” economy are international trade, cross-border investment flows, and the production of goods and services (Yalcin, 2018). An example of the globalized economy is when a factory is established in a country using capital invested in another country, which uses inputs from other countries in the production process, and targets consumers from other countries. There are different views about the emergence of globalization. On the one hand, some posit that globalization is empirical, that it is a result of the structural changes that are occurring in the way the global economy is organized and integrated (Dicken, 2015). According to this view, the advancement of communication technologies and the increase in productivity have necessitated states to expand their market territory (Yalcin, 2018). The decline in protective economic policies, the convergence of the free market economy, and the increase in incentives for foreign trade are in line with these perceived global necessities (Yalcin, 2018). On the other hand, some think that globalization is ideological (Dicken, 2015). This neo-liberal free market ideology views globalization as a project focused on improving international trade, the situation in underdeveloped countries, and the cultural relations among countries. There are three major theories or perspectives of globalization: hyper-globalization (the right) or neo-liberal theory, hyper—globalization (the left), and skepticism (Dicken, 2015). The hyper-globalizers (the right), neo-liberals, or global optimists are pro-globalizers who believe in the ideology of free and efficient markets regardless of national boundaries. They argue that “we live in a borderless world in which the ‘national’ is no longer relevant (Dicken, 2015). The world is a single economic, cultural, and environmental entity in which nation-states have much less socio-political influence or even none at all (Rashid, 2022). If free markets are allowed to rule and organizations are allowed to do business, then wealth be generated and will trickle down to everyone. On the other hand, hyper-globalists (the left) or anti-globalizers are fully opposed to the neo-liberal view. They hold that globalization is the problem, not the solution. Anti-globalizers see globalization as an extension of capitalism throughout the world, which increases the scale and extent of inequalities (Dicken, 2015). They argue that unregulated markets create few giant multinational corporations leading to a reduction in the well-being of all but a small minority in the world. Moreover, globalization creates massive environmental problems (Dicken, 2015). The only logical solution for anti-globalists is a complete rejection of globalization and a return to the local. The third view of globalization comprises skeptical internationalists, who believe that globalization is not a new process, but an ongoing form of internationalization (Solakoglu, 2016). Skeptics use empirical evidence to show that the world economy was more open and integrated before the First World War (between 1870 and 1913). It was characterized by large volumes of trade, investment, and population migration between countries (Dicken, 2015). However, since the Great Depression and the Second World War, such levels of integration have not been achieved again. Thus, skeptical internationalists conclude that what we have is not a fully globalized economy but an international economy. Question 2: Explain the terms “core” and “periphery” and explain how these concepts determined geographies before and after the 2nd World War. The core-periphery analysis focuses on the economic and political dynamics of the world, structured by spatial or territorial dimensions into core and periphery differences (Wellhofer, 1989). According to Dicken (2015), “core” refers to the industrialized and developed nations of the world (including most of Western Europe, the United States, Canada, Japan, Australia, and New Zealand), while “periphery” refers to the poor, less developed countries with exploitable resources (including Africa, and parts of Asia and Latin America). The core dominates and exploits the periphery. Core countries absorb raw materials from the periphery for the production of goods and then sell the manufactured goods to the periphery countries. Prior to the Second World War, the core had economic dominance and hegemony over the periphery. Manufacturing production remained strongly concentrated in the core. 71 percent of the world's manufacturing production came from only four countries, while nearly 90 percent was concentrated in eleven countries (Dicken, 2015). This small group of core industrial countries absorbed four-fifths of the periphery’s raw or primary products for manufacturing and sold two-thirds of their manufactured goods as exports to the periphery (Dicken, 2015). The core countries were able to get cheap raw materials from the periphery, manufacture products, and sell them back to the periphery at a higher price. These core-periphery relations made periphery countries unable to make any gains and made it impossible for them to industrialize (Klimczuk & Klimczuk-Kochańska, 2019). However, after the Second World War, there were new geopolitical realities. Shortly after the War ended, there was a major geopolitical division of the world in which the United States and its allies formed the capitalist West while the Soviet Union and its allies formed the communist East (Dicken, 2015). In the decades following the War, the global economy was characterized by a growing interconnectedness between the core and periphery parts of the world. Their interconnectedness was characterized by increased international trade and foreign direct investment (Dicken, 2015). In the past seven decades, there have been deep structural changes in the geography of the global economy. The biggest of these changes has been the emergence of new centers of production in what was regarded as the periphery before the Second World War, particularly the resurgence of East Asia. This resurgence was initially manifested by the rise of Japan since the 1960s. Japan experienced spectacular post-war economic growth, which (may) have laid the foundations for the subsequent economic development of other parts of East Asia. In the 1960s, Japan's GDP growth rate averaged 10 percent. Its manufacturing growth averaged 13.6 percent per year, four times greater than that of the United Kingdom and two-and-half-times greater than in the United States. By 1980, the country had risen to second place in the world. However, Japan’s rapid growth fell dramatically in the 1980s and 1990s. With the decline of Japan came the rather sudden re-emergence of China. Since the 1970s, China’s presence and position in the global economy have become significant. China experienced the highest growth rate in the world between 1980 and 2003, with an annual growth rate of well above 10 percent. In recent times, China has overtaken the US to become the world’s largest manufacturing producer, the largest agricultural producer, the largest merchandise exporter, and the world’s second-largest importer (Dicken, 2015). China’s development has been a powerful driver of global economic growth and has also exerted influence on other economies in both the developed and developing world. East Asia has also witnessed the emergence of a small ground of developing countries, which before the Second World War, were on the periphery and were often overlooked by the developed West. Commonly known as the four tigers, the economies of South Korea, Singapore, Hong Kong, and Taiwan has grown tremendously since the 1960s decades, thanks to massive growth in manufacturing production (Dicken, 2015). Recently, the less developed economies of Malaysia, Indonesia, and Thailand have exhibited strong potential for growth by displaying high rates of manufacturing growth (Dicken, 2015). Therefore, the core-periphery relationships have changed tremendously since 1950. Although the US still dominates the world economy, its influence is less than it did prior to the Second World War and immediately after the War ended. Europe has experienced significant economic volatility and uneven growth but is still a major player in the global economy. Europe remains the leading sour...