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Chapter Three

Chapter Three. Europe and Globalisation. Globalisation and Europe. Europe prominent player in the Global economy Europe’s response is both: -proactive (seek new markets, etc) -reactive (face increase competition). Globalisation. the IMF defined globalisation as:

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Chapter Three

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  1. Chapter Three Europe and Globalisation

  2. Globalisation and Europe • Europe prominent player in the Global economy • Europe’s response is both: -proactive (seek new markets, etc) -reactive (face increase competition)

  3. Globalisation • the IMF defined globalisation as: ` the growing interdependence of countries world-wide through the increasing volume and variety of cross-border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology.’

  4. Globalisation Drivers • The Changing Economic Paradigm • The Spread of International Governance and Regulation • Finance and Capital Spread

  5. Globalisation Drivers • The spread of ICTs • Social and Cultural Convergence

  6. Globalisation’s Impact • Varies according to: • Scope (i.e. reach across states) • Intensity (i.e. depth and embeddedness) • Sensitivity (i.e. transmission effects)

  7. Impact on Europe • Major impact is on relative economic performance. • Drives competitiveness issue • This varies across states • Large economies - poor performance • Nordic states - best performers

  8. Two Major Areas of Interest • Trade • FDI

  9. Trade • EU is a pivotal global trading entity • Over 18 % of global trade • Biggest single trader • Major partners for imports and exports

  10. Imports (2005)

  11. Exports (2005)

  12. Declining Share

  13. FDI • Largest source of funds for inward and outward FDI • 29 per cent of global flows • US is biggest recipient of EU funds but also biggest investor

  14. China, 0.1 Japan, 5.8 Rest of World, 45.4 USA, 43.9 Canada, 4.8 EU FDI Inflows (2001-2003) per cent

  15. . China, 1.6 Japan, 0.3 USA, 34.1 Rest of the World, 62.1 Canada, 2 EU FDI Outflow 2001-2003 (per cent)

  16. European MNCs • About 70 000 MNCs globally • Of the largest 500 - 159 from Europe • Most based in Northern Europe • French businesses have the widest spread • EU firms prominent in global economy

  17. Corporate Change • Policy driven change reached an impasse • Business driven change more evident • Driven by international capital

  18. Economic Nationalism • Reaction to globalisation • Seek to protect strategic assets from foreign ownership/control • Internationalisation promotes consolidation which this stance is a reaction. • Does this highlight limits to globalisation?

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