MARKET

INTEGRATION
MARKET INTEGRATION
Process by which economies are
becoming more independent and
interconnected in terms of
commodity flows including
externalities and spillover of
impacts (Genschel and
Jacktenfuchs, 2017).
2 KINDS OF MARKET INTEGRATION
(GROSSMAN AND HART, 1986)

1. Horizontal – happens when a

firm gains control of other firms
performing similar marketing
functions at the same level in
the marketing sequence.
2 KINDS OF MARKET INTEGRATION
(GROSSMAN AND HART, 1986)

2. Vertical – when one

company owns the operations
and products from one stage
to the other along the supply
chain.
 INTERNATIONAL FINANCIAL
INSTITUTIONS (IFIS)
Are institutions that provide support through loans or
grants and technical advices to promote a
country’s economic an social development
(Bhargava, 2006:393)
Also includes:
International Monetary Fund (IMF)
Multilateral Development Banks (MDBs)
Provide financial and technical services
and products not for profit but for overall
economic and social development.
Work with private sector for investment
and policy reforms to promote private
sector expansion
4 KEY ISSUES WITH IFIS

1. Legitimacy – majority of its shareholders and

policy making powers lie with powerful, rich
nations.

leadership roles in these powerful IFIs are

critical in steering the institution’s policy and
programs, including its reforms.
4 KEY ISSUES WITH IFIS

2. Effectiveness – different sectors have

questioned the effectiveness of the IFIs’
development assistance programs and policy
advices.
Social safeguards to ensure human rights,
community, and environment well-being need to
be instituted.
4 KEY ISSUES WITH IFIS

3. Support Conditionality – loans to provide

capital for development initiatives of countries.
However, it does not come for free and comes
with certain conditions that the barrowing
country has to meet.
4 KEY ISSUES WITH IFIS

4. Financial Capacity and Sustainability – IFIs

income base has reduced compared to what it
was before although the demand from IFIs are
increasing particularly in contributing toward
regional and global development initiatives.
 GLOBAL
ECONOMY
SUMMARIZED HISTORY OF THE
GLOBAL ECONOMY
Modern capitalist world economy flourished
between 16th to 18th centuries.
The start of the modern global trade leading to
1914 was considered the first period of
globalization.
From WW2 to the late 1990s, modern
international economic enabling architecture
was established.
Mexico crisis – created a negative spillover effect on US,
Europe, Portugal and Spain
Rise of Asian economy and advancement in digitalization
and technology.
Advent of modern internet, WTO establishment, formal
entry of China into the trading system
 GLOBAL CORPORATIONS

Private institutions that produce or manufacture goods, products, and

services for a more expanded market usually at the reach of regions or
the world.

Transnational Corporations (TNCs) have more complex setting. (given

freedom to develop its own product lines and marketing)

Multinational Corporations (MNCs) have a more home or country base and

focus more on exporting their products and services.