MARKET

INTEGRATION
 2.2 MARKET INTEGRATION

Learning Outcomes:
 
At the end of the lesson, the learners are expected to
demonstrate the following:
 Explain the role of international financial insitutions in the
creation of a global economy
 Narrate a short history of global market intergration in the 20 th
century
 Identify the attributes of global corporations
INTERNATIONAL FINANCIAL INSTITUTIONS

PRIVAT CITIGROUP
E MERYL LYNCH

WB
IMF IGO
ADB
 INTERGOVERNMENTAL ORGANIZATION

World Bank
Purpose: to fight poverty

Institutions:
 International Bank for Reconstruction and Development
 International Development Association
 International Financial Corporation
 Multilateral Investment Guarantee Agency
 International Center for Settlement & Investment
International Bank for Reconstruction and Development
– lends to governments of middle-income and creditworthy
low-income countries

International Development Association

– provides interest-free loans (credits) and grants to
governments of the poorest countries
International Financial Corporation
– provides exclusive help to private sector by financial
investments, mobilizing capitals, and providing advisory to
businesses and governments

Multilateral Investment Guarantee Agency

– promote direct investments into developing countries

International Center for Settlement & Investment

–provides facilities for conciliation and arbitration of
investment disputes.
 INTERGOVERNMENTAL ORGANIZATION

International Monetary Fund

Purposes: To stabilize economies
To restore sustainable growth
To balance payment problems

Regional Development Banks

Asian Development Bank
African Development Bank
 So what is the role then of IFIs in the global economy?

They are actors.

They facilitate the lending of money and provide financial grants to nation-
states and global corporations.
 Global Corporations are

INSEPARABLE
from the phenomenon of globalization.
 THE THREE PERIODS
OF GLOBAL CORPORATIONS

Colonialism American,
Trade and and Japanese, &
Exchanges European
Imperialism Corporations
 Global
(TNCs
and
MNCs)
Int’l Contemporary
Global
Corporations
International
International Global
Global
Companies
Companies Companies
Companies

Invested in and present

importers Invested
in many in and present
companies
importers in many companies

Market
Market
Exporters Products & Services
Exporters Products
to & Services
each individual
tolocal
eachmarket
individual
local market

No investment
No investment
outside home
outside home
country
country
 MNCs TNCs

They have investment They are more

in other countries, complex organizations
but do not have which have invested
coordinated product in foreign operations,
offerings in each have a central
country. They are corporate facility but
more focused on give decision making,
adapting their research and
products and services development, and
to each individual marketing powers to
local market. each individual
foreign market.
Are the following global corporations MNCs or TNCs?
 ATTRIBUTES OF GLOBAL CORPORATIONS

1. They are agents or actors of economic development

2. They gain their economic prominence.

3. They set the balance resulting from greater global

wealth inequality, income inequality, lack of effective
workers protection, environmental degradation, and in
some cases, threatened national sovereignty.

4. They are so powerful that they can create a financial

crisis if they want to.
Global corporations has brought:

1. Global inequality
2. The systematic stability and viability of the global financial
systems
3. Positive and negative contributions to the contemporary world