In developed countries, knowledge-based economies are characterized by the development of information services, and production processes are increasingly determined by the quality of such factors as information, technology, innovations, patents, etc. In addition, analogous standards of telecommunications, transaction, market, financial systems, etc. operate in different countries. Globalization is therefore still progressing.
In connection with the above, the communication, transactional and information aspects of globalization are characterized by a positive meaning. It is referred to as "the Earth as a" global village. "Through more and more modern communication, the global circulation of information is carried out in real time via Internet teleinformation systems.
But not all aspects of globalization have positive aspects.
In my opinion, globalization processes strengthen long-term business cycles. In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008. At that time bankruptcy was announced by one of the largest investment banks in the world. As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated. It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years. these processes continue. Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.
In view of the above, I am asking you: What are the most important positive and negative aspects of globalization?
Please reply. I invite you to the discussion
Dear Friends and Colleagues of RG
The issues of globalization of financial and banking systems are described in the publications:
Article CURRENT AND HISTORICAL DETERMINANTS OF GLOBALIZATION PROCESSES
Article Globalization and the process of the system and normative ad...
Article THE DEVELOPMENT OF THE BANKING SYSTEM IN POLAND DETERMINED B...
Article Adjustment of Polish banks to international standards as a f...
Article THE IMPORTANCE OF ECONOMIC GLOBALIZATION IN THE CONTEXT OF T...
Article Social and economic determinants of the processes of economi...
Article ADMINISTRATIVE, LEGAL AND SUPERVISORY DETERMINANTS OF GLOBAL...
Article The Processes of consolidation and concentration of capital ...
I invite you to discussion and cooperation.
Best wishes
I think the most important positive aspect of globalization is that it makes us more interdependent on each other, which makes the notion of wars more detrimental and less likely; the most important negative of globalization is that it can damage a national sense of unity that binds otherwise ideologically opposed populations together and can be damaging in a more local sense of creating divisions. While bring the world closer together, it has potential to tears nations apart from within.
Positives of Globalization
1. Developing countries get benefits from it through lead themselves towards economic success and ultimately achieve better standard of living as well.
2. It boosts the ongoing competition between countries all over the world as well as within any particular country.
3. Increased media coverage helps in drawing attention towards those parts of the world where human rights are violated for the benefit of the rich and powerful. This leads to improvement in human rights.
4. It increases exposure in the form of food, movies, art, music, clothing, culture, etc. This is a great way of forming closer bonds with the rest of the world.
5. It leads to a sense of competition in others; hence helping in keeping the prices of commodities under check during all times.
6. Developing countries can use existing technologies without the stress of developing any particular technology.
7. It helps in bringing different governments together so that they can work together towards achieving common goals; which is a great way of spreading global awareness regarding common concerns and issues.
Negatives of Globalization
1. It is widening the gap between the rich and poor; where rich people are becoming richer and poor are becoming poorer.
2. As a result of outsourcing, globalization may deprive an entire country of its jobs and resources. This is because globalization takes jobs away from one country and provides it to another country; hence leaving lots of people without the opportunities that they deserve.
3. Although people belonging to different cultures and countries get a chance to interact with each other, it causes a loss in tradition and values.
4. As species are deprived of their non- native ecosystems, there are increased chances of them spreading diseases and disrupting other natural ecosystems and their native species.
It is very important to strike balance between the positives and negatives of globalization so that balance can be restored in nature and its living species.
I think the most important positive aspect of globalization is that it makes us more interdependent on each other, which makes the notion of wars more detrimental and less likely; the most important negative of globalization is that it can damage a national sense of unity that binds otherwise ideologically opposed populations together and can be damaging in a more local sense of creating divisions. While bring the world closer together, it has potential to tears nations apart from within.
Our attached publication (pdf) on: The Dialectics of Modernity (Recognizing Globalization, 2014, Budapest) offers a lot of perspectives, concerning your query.
My opinion is that, after the complete fall of the state command economies around 1990, global capitalism is a logical outcome and stage of history. Now, after ~30 years, the global fight for markets intensifies and national protectionsm is on the rise. It is easier to preach free trade, when borders and walls are closed; once the whole world has become a huge financial capitalist market, nationalist concerns and fears resurrect. To sum it up: global capitalism (as contrary to national capitalism) needs a capitalist welfare system (new societal deal) or human history will speak its dictum on it. This refers to both, ecological externalities ('ecocide') and economic fairness (taxing monopolies for public revenue=geonomics).
A result of globalization, the economic growth of both developing and developed countries is impacted positively and negatively. Here are some of the positive and negative effects of globalization.
Globalization made it easier for countries to establish multilateral relationships. It also made easier for reasearcher to build a knowledge interchange. In my humble opinion, though, it has seemingly helped more powerful nations to exert more power over developing countries, similar to colonialistic relationship.
Globalization at it's inception offered those countries and its signatories immediate economies of scale. As tech' was largely insulated those developing nations were able to leverage economic benefit through careful legislative means. Macro level interplay was largely the domain of this period. In 2018 that paradigm has shifted to a micro level where tech has become embedded in just a about every sector of the economic model. As a result the level of skill required to contribute towards this new platform/s has exponentially diminished you now have a plethora of quantity of significantly lesser quality. the web was largely ignored for a very long time between 1995-2000 and this is the period when mainstream disruption was seeded by a smart few....You now see the results playing out in the 21st century..
According to our research starting with my PhD thesis at NYU Mallick (1993 and then 1994 and so on..) Globalisation can be perfectly well achieved with Financial Markets and Information Technology innovations and the www networks, which is exactly what is happening. The world growth rates has picked up in the steady state with forward looking forecasts and expectations.
S.K.Mallick
for S.K.Mallick, S.Raychaudhury, S.Mallick and others
RHMHM School
USA, Japan, India
Info tech and the advent of complex financial modelling provide an effective façade against a backdrop of economic and political meddling. If the technology advances beyond a level that we as humans cannot effectively control without the constant lure of manipulation then it will never be corrected to reflect the norms of basic supply and demand as we knew it pre war. Globalization has effected an unhealthy one world model of economic practice that promotes the value of stock over the value of society. Largely left untouched we now find this model is no longer demand driven. Instead production capability is extended to reduce the cost of sustaining it hence offering the bottom line additional upside. Any spill over is not accounted for and this area is where gross imbalance has created catastrophic results for the banking sector..
globalisation is anti competitive and therefore runs against the ethos of free market capitalism. It has resulted in a false value standard on the currency front as an erosion of sovereignty has resulted in cherry picking of goods and services to meet the agenda. If that is good or bad for the individual nations is besides the point and therefore it is unhealthy..
Positive Aspects of Globalization:
1. There is an International market for companies and for consumers, there is a wider range of products to choose from it.
2. Increase in flow of investments from developed countries to developing countries, which can be used for economic reconstruction.
3. Greater and faster flow of information (through TV, Internet) between countries and greater cultural interaction has helped to overcome cultural barriers.
4. Technological development has resulted in reverse brain drain in developing countries.
5. India gained highly from the LPG model as its GDP increased to 9.7% in 2007-2008.
Negative Aspects of Globalization:
1. The outsourcing of jobs to developing countries has resulted in loss of jobs in developed countries as a result, now they are following protectionism measures, for example USA is stopping BPO.
2. There is a greater threat of spread of communicable diseases.
3. There is an underlying threat of multinational corporations with immense power ruling the globe. For smaller developing nations at the receiving end, it could indirectly lead to a subtle form of colonization. Exploitation of labour by offering low wages.
4. Young boys and girls watching blue movies/porn videos in the internet by neglecting their studies.
5. Our culture, customs and age old good traditions are vanishing day by day, in their place unhealthy things are coming in vogue.
6. Even after globalization, condition of agriculture has not improved. The share of agriculture in the GDP is only 18%. The number of landless families has increased and farmers are still committing suicide.
It seems to me that it is good that there was a discussion in the question of this question.
The answers given are very inspiring. Thank you for your answers and I encourage you to continue your discussion, to continue the interesting discussion.
Does anyone from you conduct research in this area? Does anyone from you study the processes of contemporary economic and information globalization? I am asking because in some of my publications I am dealing with this issue and I would like to get to know different views on this subject.
The most positive one is availability of everything you need/want, as long as you can afford it; the most negative is increased intedependancy, so even if one did nothing wrong, he can suffer due to others' actions ( butterfly effect).
the professional sports industry would be an interesting hypothesis case. For instance most professional sports leagues have a bias either side of the debate. US professional sports comprise an overwhelming majority of American born and bred athletes. This is evident throughout all the major league franchises (NHL, NBA, NFL). It is no co-incidence that these franchise banners offer the most lucrative contracts of any professional sporting competition globally. Football on the other hand is played by more athletes globally yet the correlation between where these franchise brands are domiciled and the origin of those that span its ranks is not linear. Does the American model therefore prove that the heuristic US model of Nationalistic domination of a global sports brand that is inherently incestuous yet Internationally relevant disproves the notion that globalised integration is not essential to achieve global success??
"On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization."
I think you touch on the crucial nexus point where the law of diminishing returns inflicts its antiquated philosophy in 21st century economics. subsidiaries and secondary markets are one of two things, minimise overheads and insulate earnings. Globalization has run its course in terms of optionality of economies of scale and will only really suffice tot he extent that The developing world offers itself as exactly that "developing" or "undeveloped". Once they become "reasonably" self sufficient they are cast aside as old tools of leverage in an ever increasingly interconnected world. Legislation is a crucial binding factor that makes the globalization debate a rather tenuous one to say the least. Trade agreements that have been entrenched in legal scribble cannot be easily disentangled and this is the conundrum that the UK currently faces. As the world gravitates back to a more nationalistic theme and nations seek to rediscover their sovereignty it will add more weight to restoring value , not only in the dollar but also in larger scale M&A activity. Effectively the ease of M&A to date has been enhanced by globalization yet ironically the value of such deals has diminished that much more due to the erosion of competition on a global scale. A slide in the "real value" of the stock price has been spurned by the exponential explosion of debt through increased hyper liquidity that is yet to be reflected by current inflation rates...….
Can current globalization processes increase the systemic risk of global economic and financial crises?
Yes. In my opinion, globalization is leading to the Integration of Business Cycles. In this way, globalization may deepen economic crises, including the global financial and debt crisis. An example was the global financial crisis, which appeared in mid-September 2008. At that time bankruptcy was announced by one of the largest investment banks in the world. As a result of unreliable credit risk management procedures, billions of USD of financial losses have been generated. It turned out that the unwritten rule no longer works, that "big can not fall". However, it is the emergence of ever larger international corporations and financial institutions that is one of the main determinants of the processes of economic globalization that have been progressing in recent years. these processes continue. Every few years, as a result of the merger of some of the largest financial institutions through mergers and acquisitions, more and more banks are formed. On the other hand, international operating industrial corporations move their factories from country to country, looking for cheaper workforce, and international trading and service corporations set up subsidiaries and sales outlets in other countries. Capital links grow transnational and thus systemic risk grows, whose sources can be related to the progressing economic globalization.
Please reply. I invite you to the discussion
The most important positive aspect of globalization is economic convergence between poor and rich countries (Baldwin, 2016: The Great Convergence). Developing countries grow faster than advanced economies thanks to globalization. However economic inequalities are important issues within countries. The most important negative aspect is probably political tensions due to rigid ideologies and peoples' excessive fear regarding potential loss of cultural identity.
Most certainly, globalization brings different groups of people together and increases human interactions tremendously. It has helped us with fantastic opportunities for benefiting from global achievements in an unprecedented manner. However, globalization not only weakens all aspects of intra-community values but it also causes a strong economic dependence on more advanced countries.
In the context of the above considerations, the following question is also current: Do large corporations and financial institutions contribute to the generation of globalization processes? Do multinational corporations and financial institutions, including banks and investment funds, play a significant role in generating globalization processes? In recent years, the importance of supranational large corporations and financial institutions, including banks and investment funds, has been growing. These large industrial, service, commercial and financial corporations are a particularly important factor in contemporary globalization processes. If such large corporations operate cross-border, cross-border in many countries, including small economies, generate negative processes of globalization, then in these countries reverse and deglobalization processes may appear. Deglobalization, ie the reverse process to globalization, is taking place most strongly in those economic regions in which globalization processes generate many negative aspects. In view of the above, I would like to ask you: Do multinational corporations and financial institutions, including banks and investment funds, play a significant role in generating globalization processes? Please, answer, comments. I invite you to the discussion.
Are there verified and scientifically justified forecasts of the potential emergence of another global financial crisis?
In recent years, the importance of the problems of scientific attempts to verify and justify for formulated forecasts of the potential emergence of another global financial crisis is growing. The problem is particularly important because some of these theories suggest that the next global financial crisis may be similarly surprising for the majority of economic entities, but it may also be characterized by a sub-standard or higher level of negative economic effects of the downturn in the situation of the next global financial crisis.
There is no objective justification, which could be universally recognized as a highly probable forecast developed on the basis of eg an efficient combination of several theories developed on the basis of conducted scientific research. If that happened, then the principle of "self-checking prophecy" would work and expected on the basis of a widely recognized forecast at a given time the global financial crisis would not appear in the form or time when it was expected. The forecast event would not have appeared because the majority of interested persons, entities, including banks and investment funds, prepared for this expected event. As most stakeholders would trigger appropriate additional preventive and / or prudential instruments, the global financial crisis would not appear in line with the original forecast. I invite you to the discussion.
On the other hand, different subjective opinions are formulated, attempts to forecast the development of domestic and international financial markets in the coming years and the potential emergence of another global financial crisis. Since the appearance of the previous global financial crisis in mid-September 2008, economists have formulated various theories about the determinants, scale and time of the emergence of another similar financial crisis in the future. I invite you to the discussion.
For example, there were theories that after 7 years of "lean" prosperity and economic growth will take 7 years of "fat" after which another crisis may occur. Functional theories suggest that another global financial crisis will appear soon, although it is not known exactly when. These theories are based on the thesis of not correcting the functioning of the overly liberalized, deregulated financial markets, i.e. the failure to remove the main sources diagnosed as the cause of the global financial crisis of 2008. Nor have the prudential procedures for credit risk management in investment banking been fully improved. I invite you to the discussion.
Through the Federal Reserve Bank's anti-crisis policy of buying junk assets from commercial banks, millions of reprinted dollars were pumped into the economy without economic coverage in the equivalent of produced economic goods. A significant part of these additional dollars indirectly conjunctural generated a quick return of prosperity on the securities markets, perhaps too fast because in a few years after the global financial crisis in 2008, the valuation of securities on the largest securities markets exceeded the level of autumn 2008 . I invite you to the discussion.
However, in the domestic economies there has been a clear improvement in the economic situation in, among others, production, income, investment, purchase of real estate, drop in unemployment, etc. The optimal quality of commercial banks' loan portfolios and the growing level of savings of people with a low share of financial surpluses in securities seem to suggest that the systemic credit risk in the economy has not yet reached its maximum levels. This subject is the subject of research, which I conduct in the area of the necessity of continuing the process of credit risk management improvement, examined, measured and accepted by commercial banks. I have published several scientific articles on this topic.
In view of the above, the current question is: Are there verified and scientifically justified forecasts of the potential emergence of another global financial crisis?
Please, answer, comments. I invite you to the discussion.
Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?
In principle, YES, but it should be specified precisely the framework for a possible anti-crisis launch and implementation of the policy of active state intervention. The Federal Reserve Bank should continue to fulfill its current functions. In this respect, it is the most important institution in the US in terms of maintaining financial stability in the banking system and indirectly in the entire financial system. In addition, indirectly supports inter-branch, transactional, market, business and cross-border trade and capital flows. As the Federal Reserve advises on the issue of maintaining financial stability, it also translates into the entire US economy and also to a large extent on the entire global economy while the economy The US is recognized as a key global player. On the other hand, the Federal Reserve Bank, using its monetary policy instruments and the possibility of buying back lost commercial loans and junk securities, should focus on stabilizing the situation on the financial markets rather than on actively stimulating demand for securities, which may generate another global one in the long run. financial crisis. I examined this problem and described it in my scientific publications.
In view of the above, the current question is: Should the Federal Reserve Bank in the US be the main institution shaping and leading pro-growth active state interventionism?
Please, answer, comments. I invite you to the discussion.
The issues of globalization of financial and banking systems are described in the publications:
https://www.researchgate.net/publication/323244562_Adjustment_of_Polish_banks_to_international_standards_as_a_factor_of_globalization_of_the_national_financial_system
https://www.researchgate.net/publication/320061057_THE_IMPORTANCE_OF_ECONOMIC_GLOBALIZATION_IN_THE_CONTEXT_OF_THE_DEVELOPMENT_OF_THE_FINANCIAL_SYSTEM_IN_POLAND
https://www.researchgate.net/publication/327201145_Social_and_economic_determinants_of_the_processes_of_economic_globalization_that_shape_the_development_of_the_banking_system_in_Poland
https://www.researchgate.net/publication/320074691_ADMINISTRATIVE_LEGAL_AND_SUPERVISORY_DETERMINANTS_OF_GLOBALIZATION_OF_FINANCIAL_MARKETS_AND_THE_BANKING_SYSTEM_IN_POLAND
I invite you to discussion and cooperation. Greetings
Dear Friends and Colleagues of RG
The issues of risk management in the context of determinants of the global financial crisis, globalization processes, technological progress and other factors I described in the publications:
Article APPLICATION OF DATA BASE SYSTEMS BIG DATA AND BUSINESS INTEL...
Article GLOBALIZATIONAL AND NORMATIVE DETERMINANTS OF THE IMPROVEMEN...
Article Determinants of credit risk management in the context of the...
Article Importance and implementation of improvement process of prud...
Article The role and application of Keynesian macroeconomic anti-cri...
Article THE SHADOW BANKING AS AN EXAMPLE OF INEFFICIENCIES IN THE FU...
I invite you to discussion and cooperation.
Best wishes
Dear Friends and Colleagues of RG
The issue of the impact of monetary policy on the stability of financial systems in the context of the global financial crisis is described in the publication:
Article ACTIVATING INTERVENTIONIST MONETARY POLICY OF THE EUROPEAN C...
Article A safe monetary central banking policy as a significant inst...
Article Anti-crisis state intervention and created in media images o...
Article Soft monetary central banking policy and Plan for Responsibl...
I invite you to discussion and cooperation.
Greetings
Globalization has really revolutionized the day to day life of an ordinary citizen also.It has really very far reaching influence on the nation as a whole.In India,the process of LPG(Liberalization, Privatization and Globalization) was started in 1991,believe me,since then, the total scenario has been changed.Increase in competition has really resulted in survival of the fittest.On the negative side,it may be remarked that various cultural issues may be there,apart from the loss to the local companies/business enterprises.
Dear Friends and Colleagues of RG
The issues of globalization of financial and banking systems are described in the publications:
Article CURRENT AND HISTORICAL DETERMINANTS OF GLOBALIZATION PROCESSES
Article Globalization and the process of the system and normative ad...
Article THE DEVELOPMENT OF THE BANKING SYSTEM IN POLAND DETERMINED B...
Article Adjustment of Polish banks to international standards as a f...
Article THE IMPORTANCE OF ECONOMIC GLOBALIZATION IN THE CONTEXT OF T...
Article Social and economic determinants of the processes of economi...
Article ADMINISTRATIVE, LEGAL AND SUPERVISORY DETERMINANTS OF GLOBAL...
Article The Processes of consolidation and concentration of capital ...
I invite you to discussion and cooperation.
Best wishes
The most important positive effect is knowledge spillover. Also, good economic relations are to a certain extent predictors of good political relations. So we can assume that globalization can contribute to global peace.
the true success can be garnered by the output per capita or GDP per capita. In countries such as Switzerland and Singapore this figure is much higher than the rest of the world in that they have leveraged and honed a very successful niche of industries that caters to the abilities of its citizens. Therefore there is very little need for social welfare to counter issues such as employment, poverty, inequality. In other words people actually enjoy contributing towards the success of the economy because it is what "they" as a nation are very good at (ie they have a niche that is directly correlated to their populous). These countries are also less susceptible to the ebbs and flows of global fiscal and monetary constraints as exemplified by events such as the GFC. If there is a crises there is sufficient reserves in the govt coffers to ride out the storm on a macro/mirco level until some level of market risk equilibrium is restored. You will find these economies much more "economically" and "socially" resilient to these events. They also focus on a niche that is monopolistic in terms of its offering to the market. This may take the form of advanced technology and research in the pharmaceutical or robotic sector or a hub as an intermediary to other markets for key necessities such as crude oil. Larger economies tend to struggle with this model as they are more exposed to higher debt levels and are much slower on the uptake of speed to market due to their burdensome bureaucracies. Globalization intends to cut through the red tape (particularly for the larger more developed economies to enable them to utilize those channeled agreements quickly and efficiently so that their boat floats !
Dear Friends and Colleagues of RG,
The issues of globalization of financial and banking systems are described in the publications:
Article CURRENT AND HISTORICAL DETERMINANTS OF GLOBALIZATION PROCESSES
Article Globalization and the process of the system and normative ad...
Article THE DEVELOPMENT OF THE BANKING SYSTEM IN POLAND DETERMINED B...
Article Adjustment of Polish banks to international standards as a f...
Article THE IMPORTANCE OF ECONOMIC GLOBALIZATION IN THE CONTEXT OF T...
Article Social and economic determinants of the processes of economi...
Article ADMINISTRATIVE, LEGAL AND SUPERVISORY DETERMINANTS OF GLOBAL...
Article The Processes of consolidation and concentration of capital ...
I invite you to discussion and cooperation.
Best wishes
The potential good of globalization is the effect of competition being brought to bear on every activity in every nation. World-wide efficiency and effectiveness will make goods and services cheaper for all once everyone begins to participate in the world-wide trading network.
The downside is that once world-wide standards and imposed, new and radical ideas will be stifled as there will be no corner of the world left that is un-inspected and un-regulated --- a place that can escape the rules and regulations imposed from some central authority that will invariably slow innovation and stifle invention.
Biggest advantage: Global mobility of people.
Biggest Disadvantage: Local Manufacturing Sector unable to compete with giant MNCs.
After witnessing the deep state coup occurring in the US, I now believe that the globalization efforts have led to covert missions that undermine official work, and ultimately result in division, abandonment of the rule of law, and decreased civilian responsibility. Currently, the state department and the intelligence agencies view a president as a rotating door, and they have clearly undermined democracy so they, in their own world, can exert control. This was witnessed yesterday when it was exposed during the impeachment hoax hearings, which themself are simply insubordinate efforts by disenfranchised ineffective politicians trying to hang on to their cushy salaries, payouts as contracted intelligence workers, and access to tax payer dollars for personal gain, as shown with the Biden $85000/mo payout, the Chelea Clinton $50k/mo first job as journalist with no experience, and many other corrupt crony deals arranged by a deep state focused on using "globalization" as an ends to justify the means. Raising the global standard of living is happening, but when it occurs due to lawlessness, it will quickly fall into the hands of the corrupt. That is what we have witnessed, and it is because of that criminality that the current president was elected. Globalization requires responsibility on behalf of the people who are in positions of power... the current global power structure is built on a deep state corruption of power.
Dear Colleagues and Friends from RG,
The above discussion inspired me to formulate the following question:
What are the correlations between economic globalization and concentration of capital, the emergence of larger transnational corporations, the effectiveness of the financial system and financial risk management, including credit risk?
What are the economic effects of globalization?
On the basis of the above considerations and conclusions from the discussion on interesting issues discussed, I formulated the following thesis that there are specific correlations between economic globalization and the concentration of capital, the emergence of larger transnational corporations, the effectiveness of the financial system and financial risk management, including credit risk management.
Below I have described the key determinants confirming the formulated research thesis. To the above discussion, I would like to add the following conclusion formulated as a summary of my previous considerations on this topic: Economic, financial and technological determinants of globalization.
Below I have described several aspects of the functioning of financial institutions and financial markets that can be linked to the issue of economic globalization. One of these issues is the concentration of capital associated with the emergence of larger transnational corporations and financial institutions. In connection with the development of economic globalization in international financial systems, the increase in the scale of mergers and acquisitions in the field of capital transactions in the financial sector, which leads to the emergence of larger and larger banks operating globally, in addition to deregulation in financial markets, the growing importance of monetary policy in the context of interventionist economic policy, the development of international liquid exchange rate systems on currency markets, the development of derivatives used not only to hedge other financial transactions but also to speculative activities on capital markets, etc. since the 1970s, systemic credit risk has been increasing and the frequency and scale of domestic and supranational occurrences financial and economic crises. In connection with the increase in systemic credit risk, the importance of effective operation of financial supervision institutions and improvement of the credit risk management process is increasing.
Another issue that can be linked to the ongoing processes of economic globalization is the role of central banking in the economies of highly developed countries, which has been growing since the 1970s. Central banks in the world's largest economies such as the Federal Reserve Bank in the USA and the European Central Bank in the European Union. Since the 1970s, the influence of these largest central banks has been growing not only on individual domestic economies but also on international financial markets. In the 1990s, serious mistakes were made in allowing investment banking to be combined with the classic deposit and credit banking system in the Anglo-Saxon financial system, thus lifting restrictions and instruments ensuring a high level of system security in commercially operating financial systems. These types of erroneous changes in prudential regulations that reduce the scope of effective operation of financial supervision institutions and credit risk management systems increase the likelihood and scale of negative effects of subsequent financial and economic crises. To this should be added the serious mistakes that were made in shaping monetary policy and allowing the rapid growth of public debt in public finances even before the global financial crisis emerged in autumn 2008. In the context of these facts and the increase in systemic credit risk, there are considerations whose main purpose is to verify the research thesis on the question of the possible excessive growth of the commercially operating financial system in modern economies and on an international scale, far above the needs and macroeconomic conditions of currently functioning national economies. Therefore, in order to verify this type of theses, one should consider the answer to the following question: Is the over-expanded commercially operating financial system operating more and more speculative on financial markets, including not only credit but also securities, derivatives and currency markets, speculative investments in raw materials, etc. in modern national economies and on a global scale may displace classically implemented investments involving the implementation of investment projects leading to the creation of real, direct, sustainable, investment financial economic goods by enterprises (financed from non-bank financial sources) and by the state (investments financed from public funds, with particular emphasis on national economies with their own national currency)?
As the dominant banking models, such as the Anglo-Saxon banking model and universal European banking, are exerting an increasing impact on the banking systems of other countries, the links between these processes and the issue of economic globalization also affect globalizing financial markets. In connection with this, international standards are subject to specific formulas for banking products and financial services and international standards are subject to specific banking procedures, including instruments developed as part of improved risk management processes. The process of improving credit risk management is implemented mainly at the level of a specific commercial bank. Central and supervisory institutions, which mainly include central banking and banking supervision institutions, may affect some aspects of this process, correct possible excessive levels of systemic credit risk, especially in a situation where a given bank unreliably implements prudential procedures in the field of lending activity or in a deteriorating situation loan portfolio quality caused by the recession in the domestic and possibly global economy. Before the emergence of the global financial crisis in autumn 2008, there was an unwritten rule in some financial environments that a large banking entity could not fail. The declaration of bankruptcy by one of the largest investment banks Lehman Brothers, whose bankruptcy began the global financial crisis, questioned this type of opinion regarding entities of the financial system.
To analyze the correlation of the effectiveness of the process of improving the credit risk management process in commercial banks and the shaping of monetary policy by the central bank, the key issue is the relationship between central banking and commercial banking that has been built over the years. For example, the issue of implementing central bank assistance functions for commercial banks in the event of a significant increase in liquidity and debt risk, problems with the effective management of assets and liabilities and / or in the case of high risk of bankruptcy. In such a situation, a commercial bank may ask the central bank for help in the form of low-interest loans, interest-bearing loans on preferential terms, while increasing the scope of financial management control. In addition, the possibility of buying commercial junk securities and other assets and outstanding loans from banks. This type of central banking assistance activity towards commercial banks, including investment banks, has been used on a large scale since September 2008, i.e. since the beginning of the development of the largest global economic crisis in the history of global financial crisis. However, it is possible to diagnose situations in which as part of this assistance activity of the central bank towards commercial banks, including investment banks, the moral risk and disregard of the principles, methods and procedures of the banking risk management process, including credit risk management, liquidity risk, may be neglected. debt risk and other risk categories. In recent years, IT systems risk management and Internet data transfer processes have also been globalized. In this way, economic and financial globalization is combined with technological and information globalization.
For example, if central banking suggests to commercial banks, including investment banks operating on capital markets, that in the event of a financial crisis it will come to the rescue to eliminate the potential risk of bankruptcy of many entities of the financial system, how do these declarations translate into an approach to improving the credit risk management process and to comply with banking procedures regarding lending and securities operations and to comply with good business practices? In my opinion, such unwritten declarations can increase moral risk and reduce pressure and the need to improve credit risk management processes. Does any of you examine these issues in the context of analyzing sources, factors of financial and economic crises? Does any of you examine this issue in connection with the issue of economic and financial globalization? I am researching this issue and invite you to cooperation. I described the results of my research in scientific publications that are available on the Research Gate portal. I invite you to cooperation.
In line with the above, in my opinion, there are specific correlations between economic globalization and capital concentration, the emergence of increasingly large transnational corporations, the effectiveness of the financial system and financial risk management, including credit risk.
Do you agree with me on the above matter?
I conduct research in this area. The conclusions of the research I published in scientific publications that are available on the Research Gate portal.
In view of the above, I am asking you the following questions:
- Can the processes of economic globalization be related to the issue of concentration of capital and the emergence of increasingly larger internationally operating industrial, service and financial corporations?
- Can the processes of economic globalization be related to the issue of the effectiveness of the financial system, including the monetary policy of the largest central banks?
- Can the processes of economic globalization be linked to the issue of financial risk management, including credit risk?
- What are the correlations between economic globalization and concentration of capital, the emergence of larger transnational corporations, the effectiveness of the financial system and financial risk management, including credit risk?
- Is the fact that in recent years globalization processes of IT systems risk management and data transfer on the Internet are also subject to this - is this the way economic and financial globalization is combined with technological and information globalization?
- What are the economic effects of globalization in your opinion?
- What do you think about this topic?
- What is your opinion on this topic?
Please reply.
I invite you to discussion.
Thank you very much.
Best wishes.
Dariusz Prokopowicz
Paul: The positive effects of globalization include technology transfer, better relations between countries, and comparative advantage.
The downside is trade deficits, loss of domestic jobs, and the race to the bottom (i.e. lowest wage countries).
Using a fixed set of norms and standards across the globe would certainly create interpersonal rapport and eliminate irrational ethno-cultural differences. However, it may also lead to the eradication of long established local norms and values. Consequently, the dominant opinion these days is focused on a middle of the road approach called glocalization valuing both local and international standards cumulatively.
In 2020, there was another important determinant of globalization added to many factors of globalization. It is the SARS-CoV-2 coronavirus pandemic (which causes the Covid-19 disease). However, the problem is very complex, multifaceted and generates, on a large scale, many negative aspects in terms of health, society, economy, etc., but also on a smaller scale, also positive factors, such as acceleration of the digitization of the economy and an increase in pro-ecological (environmental) awareness.
What is your opinion on this topic?
Best regards,
Dariusz Prokopowicz
Full agreement with Kenneth Loebel I would like to add: since the collapse of Soviet command economics (1989/1990), 2 global contra-polar mass motions happened: full and total export of jobs to low wage countries and migration into established welfare systems. The mentioned deep state is the logical economic consequence of a globalizing rentier capitalism, where unearned income is maximized via economic rent and ‚creative‘ accounting.
Dear Stephen I. Ternyik, Thank you for participating in the discussion. A very inspiring and interesting answer. I am glad that the discussion is taking place and developing on this topic.
Thank you very much and best regards,
Dariusz Prokopowicz
The positive is on bringing the knowledge and talent to learn with one another on being innovative and creative, while the negative is on lacking better ways to promote sustainability that reaches out to all stakeholders involved.
I believe that the most important positive aspect of globalization is that it makes us more interdependent on one another, which makes the notion of wars more detrimental and less likely; the most important negative aspect of globalization is that it can harm a national sense of unity which unites otherwise politically opposed populations and can destroy them in a more local context. It has the power to break nations apart from within while putting the world closer together.
Globalization has brought benefits in developed countries as well as negative effects. The positive effects include a number of factors which are education, trade, technology, competition, investments and capital flows, employment, culture and organization structure.
Dariusz Prokopowicz Only a short historical note: it was a very interesting observation to recognize Pope John Paul II as the first famous critique of globalization, with reference to Laborem Exercens; the ‚Polish‘ spiritual leader remained true to his original mission, which included the humanitarian critique of the ‚state commanded (Soviet) system‘.
Dear Ravee Art Phoewhawm,
Yes, international flows of modern technologies have positive effects in improving the economic development of individual countries. However, there is still too little globalization in terms of implementing the principles of sustainable development, reducing greenhouse gas emissions, pro-ecological transformation of the energy sector, etc. I fully agree with your opinion on this subject.
Best regards,
Dariusz Prokopowicz
Dear Abrar Hossain Tasin,
Yes, political globalization, which reduces the risk of international armed conflicts, is a positive aspect of globalization processes. All countries of the world should participate in this kind of globalization, so that there are no more armed conflicts.
Best regards,
Dariusz Prokopowicz
Dear Aijaz Panhwar,
Yes, highly developed countries may in some respects benefit more from the processes of economic globalization than less developed countries. However, in order for the world's economic development to be more balanced, the processes of economic globalization should be coordinated in such a way that all countries of the world, as closely as possible, benefit from the ongoing globalization to the same extent.
Best regards,
Dariusz Prokopowicz
Dear Stephen I. Ternyik,
Yes, you have noticed an interesting issue of criticizing the processes of political globalization. In my opinion, this criticism concerned primarily a specific political system and, to a lesser extent, political globalization. If political globalization concerns democratic systems, then the criticism is much smaller than the criticism of systems that are politically undemocratic, only dictatorial. If political globalization is implemented in accordance with the principles of citizens' freedom, democracy, respect for different values and cultures, peaceful resolution of political and other problems, avoiding armed conflicts, etc., then this kind of globalization is not criticized. Criticism concerns certain undemocratic systems that do not respect other systems of values and cultures, do not respect the freedom of citizens, lead to armed conflicts, etc.
Best regards,
Dariusz Prokopowicz
I examined the positive and negative aspects of globalization on the example of economic globalization taking place in the context of international financial systems, internationally operating major central banks, international ties of capital markets, business cycles synergistically operating on capital markets, including stock exchanges, international corporations, investment banks, rating agencies and investment funds. In addition, I researched the issues of economic globalization against the background of international financial markets in relation to the sources of the global financial crisis of 2008. I have published my conclusions from the research in scientific publications that are available on the Research Gate portal. I invite you to research cooperation.
Best regards,
Dariusz Prokopowicz
Globalization has brought benefits in developed countries as well as negative effects. The positive effects include a number of factors which are education, trade, technology, competition, investments and capital flows, employment, culture and organization structure.
Globalization in short, points to the whole effort towards making the world global community as a one village. Goods that were only found in western countries can now be found across the globe. Now under developed areas can enjoy the benefits of scientific advances and industrial progress available in developed countries for the improvement and growth of their areas.
Because of globalization the economies of the world are being increasingly integrated, example mobile phones and internet have brought people closer. The world is becoming a smaller place. Work can be outsourced to any part of the world that has an internet connection because of improvements in traffic infrastructure one is able to reach one’s destination in a short time.
Globalization can also be defined as an ongoing process by which regional economies, societies and cultures have become integrated through a globe-spanning network of communication and trade. The process of globalization includes a number of factors which are rapid technology developments that make global communications possible, political developments such as the fall of communism, and transportation developments that make traveling faster and more frequent. These produce greater development opportunities for companies with the opening up of additional markets, allow greater customer harmonization as a result of the increase in shared cultural values, and provide a superior competitive position with lower operating costs in other countries and access to new raw materials, resources, and investment opportunities.
Globalization through global communications, global markets and global production have promoted and facilitated by a fourth area of global activity in relation to money. For example, the American dollar, the Japanese yen, Euro and other major national currencies circulate globally. They are being used anywhere on earth and moving electronically and via air transport anywhere in effectively no time. Most bankcards can extract cash in local currency from the thousands of automated teller machines (ATMs) across the world. Also credit cards like Visa, MasterCard and American Express can be used for payments in almost every country in the globe (Scholte J.A., 2000).
People can move from one country to another, trade restrictions are reducing, domestic markets are opening up for foreign investments, telecommunications are better established and the countries that are leading the innovations are passing on their technologies to other countries in need
Most successful emerging markets in developed countries are a result of privatization of state owned industries. In order for these industries to increase consumer demand many of them are attempting to expand and extend their value chain to an international level. The impact of globalization on business management is seen by the sudden increase of number of transactions across the borders. In protecting yields and maintaining competitiveness, businesses are continuing to develop a wide range of their footprint as it lowers cost and enjoys economies of scale
Multinational corporations is a result of globalization. They occupy a central role within the process of globalization as evidenced through global foreign direct investment inflows. Their concentrations within Europe in western economies has led to size constraints, therefore there is a need for new geographical areas to operate whereby they will face a lot of competition in the market. Through this they will enlarge their market and enjoy economies of scale as globalization facilitates time space compression, economies compete at all levels including that of attracting investors
Globalization tend to be the realm of elite because in many parts of the world they are the only people who are affluent enough to buy many of the products available in the global marketplace. Highly educated and wealthy people from different backgrounds interact within a westernized milieu. Western styles, since are symbols of affluence and power, the elite often embraces western styles of products and pattern of behavior in order to impress others. Today Western culture and patterns of behavior and language are staples of international business
Globalization has created and expanded foreign trade in the world. Things that were only found in developed countries can now be found in other countries across the world. People can now get whatever they want and from any country. Through this developed countries can export their goods to other countries. Countries do business through international trade, whereby they import and export goods across the global. These countries which export goods get comparative advantages. Organizations have been established with a view to control and regulate the trade activities of the countries in the world so to have fair trade. World trade organizations emerged as a powerful international organization capable effectively influencing individual governments to follow international trade rules, copyrights, policies on subsidies, taxes and tariffs. Nations can not break rules without facing economic consequences
One of the most visible positive effects of globalization in India is the flow of foreign capital. A lot of companies have directly invested in India, by starting production units in India, but what we also need to see is the amount of Foreign Investment Inflow that flows into the developing countries. Indian companies which have been performing well, both in India and off the shores, will attract a lot of foreign investment, and thus pushes up the reserve of foreign exchange available in India. This is also one of the positive effects of globalization in US and other developed countries as developing countries give them a good investment proposition.
Managers’ objectives might not be the same with those of stockholders in some situations. The more complex the corporation the more difficult it is for shareholders to monitor management’s actions whereby it provides the managers more freedom to act in their own self interest at the expense of shareholders. Multinational firms are more complex than national firms. Managers might favor international diversification because it reduces firm specific risk or adds to their prestige. These goals might be of little interest to shareholders. This divergence of interests between shareholders and managers, might reduce the value of multinationals relative to domestic firms
One of the most visible positive effects of globalization is the improved quality of products due to globe competition. Customer service and the ‘customer is the king’ approaches to production have led to improved quality of products and services. As the domestic companies have to fight out foreign competition, they are compelled to raise their standards and customer satisfaction levels in order to survive in the market. Besides, when a global brand enters a new country, it comes in riding on some goodwill, which it has to live up to. This creates competition in the market and a survival of the fittest situation.
The positive effects of globalization on culture are many! Not all good practices were born in one civilization. The world that we live in today is a result of several cultures coming together. People of one culture, if receptive, tend to see the flaws in their culture and pick up the culture which is more correct or in tune with the times. Societies have become larger as they have welcomed people of other civilizations and backgrounds and created a whole new culture of their own. Cooking styles, languages and customs have spread all due to globalization. The same can be said about movies, musical styles and other art forms. They too have moved from one country to another, leaving an impression on a culture which has adopted them.
JOBS INSECURITY.
In developed countries people have jobs insecurity. People are losing their jobs. Developed nations have outsourced manufacturing and white collar jobs. That means less jobs for their people. This is because the manufacturing work is outsourced to countries where the costs of manufacturing goods and wages are lower than in their countries. They have outsourced to developing countries like China and India. Most people like accountants, programmers, editors and scientists have lost jobs due to outsourcing to cheaper locations like India.
Globalization has led to exploitation of labor. Safety standards are ignored to produce cheap goods. “In practice, however, the recent experience in Latin America has been that many such open-handed multinationals moved their operations to, for example, China or South East Asia because of cost and market considerations”
FLUCTUATION IN PRICES.
Globalization has led to fluctuation in price. Due to increase in competition, developed countries are forced to lower down their prices for their products, this is because other countries like China produce goods at a lower cost that makes goods to be cheaper than the ones produced in developed countries. So, in order for the developed countries to maintain their customers they are forced to reduce prices of their goods. This is a disadvantage to them because it reduces the ability to sustain social welfare in their countries.
Cultural diversity, networking, and knowledge exchange could be some positive aspects of globalization.
Not meeting local culture, norms, traditions, and needs could be some negative aspects of globalization.
Globalization provides businesses with a competitive advantage by allowing them to source raw materials where they are inexpensive. Globalization also gives organizations the opportunity to take advantage of lower labor costs in developing countries, while leveraging the technical expertise and experience of more developed economies. Not everything about globalization is beneficial. Any change has winners and losers, and the people living in communities that had been dependent on jobs outsourced elsewhere often suffer. Effectively, this means that workers in the developed world must compete with lower-cost markets for jobs; unions and workers may be unable to defend against the threat of corporations that offer the alternative between lower pay or losing jobs to a supplier in a less-expensive labor market.
Hello Dear Everyone,
Dear colleague, I am happy with our cooperation. I am happy with our joint discussions. Thank you very much for participating in the discussion and for answering the question: What are the most important positive and negative aspects of globalization? Thank you very much for the rich, substantive information and explanations on the topic globalization. Very interesting considerations. A very inspiring and interesting answer. An interesting discussion ensued. Thank you very much for a substantive, constructive reply. A very good answer on this topic. Your statements confirm that the above-mentioned issues are current and developing. I am glad that the discussion is taking place and developing on this topic.
Thank you very much and best regards, Have a nice day,
Dariusz Prokopowicz
Dear Dariusz Prokopowicz,
In my opinion, the positive aspect of globalization of banking is the improvement of the quality of banking services and their size and scope. The negative aspect is the deregulation proces. Such examples, like the Gramm-Leach-Bliley Act which lifted the division into commercial banking and investemnt banking pose a great threat for the retail customers. The financial sector should project the weakest customers... Ant the second story is how the monetary integration in the EU will finish. It is still unclear situation.
Regards,
Piotr
POSITIVE IMPACTS OF GLOBALIZATION
- Gives Access to a Larger Market
Through globalization countries and companies have access to a bigger consumer base. Instead of only selling products in their country a business can expand to other regions boosting sales and in the process making more money.
- Globalization Wets Countries do what They do Best
- For example, a country can buy cheap steel from another country instead of making its own steel. They can then focus their efforts on making other things they are good at like computers and export them to the countries they import cheap steal from.
NEGATIVE IMPACTS OF GLOBALIZATION
- Causes Fluctuation of Prices
- Increased competition means that businesses with the best prices win. Due to competition prices are always fluctuating, for example, a country like the US has to reduce its prices often to compete with prices for the same product coming from China. China’s production costs are lower than the US hence they can have ridiculously low prices. For the US companies reducing prices will have a negative effect on their profits which in turn may led to actions like laying off workers.
- Job Insecurity
Globalization provides a double-edged sword when it comes to jobs. It creates jobs for people in developing countries who provide cheaper manufacturing jobs. For example, many companies are setting up in India and China because wages and manufacturing jobs are cheaper there this means less opportunities in developed worlds. In short, globalization takes jobs from one country and provides them to another. This can be negative or positive depending on what part of the world you are in.
Dariusz Prokopowicz
Dear Researcher,
This is a very beautiful question about globalization.
One of the major problems of globalization is that it produces one world and thus, destroys individuality. In the pre-globalization world individuality was very much respected. After globalization, a conscious effort had to be made to destroy that individuality and reach the global standards, which became the only acceptable standard. This transformation involved a financial consideration which brought in financial darkness in many regions of the world.
One of the major advantages of globalization is that it does not allow anyone to be alone. The world became a smaller place as a result of it. You are always surrounded by a lot of people around you. This gives a feeling of protection to insecure human minds.
Thank you.
Best regards,
Anamitra.
Dear Dariusz Prokopowicz in terms of positive aspects, I think globalisation evidences the planetary interdepencies which are very important to tackle global problems such as environmental degradation, climate change, biodiversity loss, among others. The negative aspects are related to the so called "dictatorship of financial international markets" (BLOCK, Fred (1996). The Vampire States and Other Stories. New York: New Press) that requires policies of a laissez-faire State, in which the environment, the treatment of labour, and the health of the consumers are sacrificed at the altar of commerce.
Easy communication and networking, Knowledge sharing and technology transfer, online shopping, and Int trade are the major positive aspects of globalization as per I think.
I am pleased that so many different positive and negative aspects of globalization have been defined in this discussion. Best wishes,
Dariusz Prokopowicz
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