MARKET

INTEGRATION
 DEFINITION OF
MARKET INTEGRATION
According to the Cambridge Business
English Dictionary, Market Integration
is a situation in which separate markets for
the same product become one single
market, for example when an import tax
in one of the market is removed.

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 DEFINITION OF
MARKET INTEGRATION
Integration is taken to denote a state of
affairs or a process involving attempts to
combine separate national economies
into larger economic regions (Robson,
1998, p.1)

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 FREE TRADE
DEFINITION
Free Trade wherein international trade (the
importation and exportation) left to its natural
course without tariffs and non-tariff trade
barriers such as quotas, embargoes, sanctions
or other restrictions.

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• TARIFFS
• ECONOMIC SANCTIONS
- taxes or duties to be
paid on a particular class of imports - commercial and
or exports financial penalties applied
by one or more countries
against a targeted country,
• EMBARGO
group, or individual
- a government-instituted
- takes away some
prevention of exports to a certain
country. Official ban on trade or other
form of trade or financial

commercial activity. (The United relations from a country. It’s

States has imposed several long- used to moderate country
running embargoes on other behavior or even to punish a
countries including Cuba, North country acting out of order.
Korea and Iran
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 FREE TRADE AREAS /
TRADE BLOCS
- a group of countries within which tariffs
and non-tariff trade barriers between the
members are generally abolished but with no
common trade policy toward non-members.
Both in the sense of geography and price, is
the foundation of these trading agreements.
However, tariffs are not necessarily completely
abolished for all products. Free trade areas
impose exclusivity among its members since
the world is not entirely a free trade economy

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 FREE TRADE ISSUE
In government, free trade is
predominately advocated by political
parties that hold right-wing economic
positions, while economically left-wing
political parties generally support
PROTECTIONISM.

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PROTECTIONISM

- the theory or practice of shielding a

country's domestic industries from foreign
competition by taxing imports to protect their
domestic industries

ECONOMIC NATIONALISM/PATRIOTISM

- an ideology that favors state interventionism

in the economy, with policies that emphasize
domestic control of the economy, labor, and
capital formation, even if this requires the
imposition of tariffs and other restrictions on
the movement of labor, goods and capital

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 GLOBAL
CORPORATIONS

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DEFINITION OF CORPORATION
A corporation is an artificial being
created by operation of law, having the
right of succession and the powers,
attributes and properties expressly
authorized by law or incident to its existence
(Batas Pambansa Blg. 68 The Corporation
Code of The Philippines, Section 2 –
Corporation defined)

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DEFINITION OF CORPORATION
According to Investopedia, a corporation is
a legal entity that is separate and distinct
from its owners. Corporations enjoy most
of the rights and responsibilities that an
individual possesses; that is, a corporation
has the right to enter into contracts, loan
and borrow money, sue and be sued,
hire employees, own assets and pay taxes.

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DEFINITION OF CORPORATION
Based on Entrepreneur Asia Pacific Small
Business Encyclopedia, corporation is a
form of business operation that declares
the business as a separate, legal entity
guided by a group of officers known as the
board of directors.

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 THE BIRTH OF
CORPORATIONS
Earliest forms of
Global Corporations
(Religious and
Mercantile Sector)

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• Roman Catholic Church

• Muscovy Company

• The British East India Company

• Dutch West-Indische Compagnie

• Industrial Revolution 1700’s

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 THE
CONTEMPORARY
GLOBAL
CORPORATION

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A global corporation is generally referred to
as a multinational corporation (MNC),
transnational corporation (TNC),
international company.

An enterprise that engages in activities

which add value (manufacturing,
extraction, services, marketing, etc) in
more than one country (United Nations
Centre On Transnational Corporations,
1991).

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 A multinational corporation
(MNC) is a company that
MNCs place multiple
operates in more than one
production facilities in
country. Generally, multinational
multiple countries under corporations consist of
the control of a single separate companies (called
corporate structure subsidiaries) in different

(Oatley, International countries, all of which answer

to a central office located in the
Political Economy 5th
firm’s home country (Riggs,
Edition).
Everyday Finance: Economics,
Personal Money Management,
and Entrepreneurship
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FOREIGN DIRECT INVESTMENT occurs when a firm based in once
country builds a new plant or a factory or purchases existing one in
a second country a national corporation thus becomes an MNC by
making a foreign direct investment. As consequence, the world's
stock of FDI, the total amount of foreign investment in operation
has grown from 692.5 billion dollars in 1980 to 16.2 trillion dollars
in 2008 (United Nations Conference on Trade and
Development 2009,251) 2,300
percent increase in less that 30years.
TACTIC OF
MULTINATIONAL
CORPORATIONS

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HORIZONTAL INTEGRATION VERTICAL INTEGRATION

- firms creates multiple production of TYPES OF - firms internalize their transaction for

FDI
facilities each of which produces the intermediate goods. An intermediate
same good/s good is an output of one
production process that serves as
- Firms integrate horizontally when
an input into another production
a cost advantage is gained by placing
process.
a number of plants under common
administrative control. - Specific asset is an investment that is
dedicated to a particular long-
- Intangible asset can be based on
term economic relationship. By
patented process or design. These
internalizing transactions involving
assets are difficult to sell to other
specific assets, therefore, vertical
firms at a price that accurately
integration enables welfare-
reflect their true value that's why
improving investments
firms horizontally integrate.
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Contributions of Multinational Corporations

• Improving the balance of payments

• Providing employment

• Source of tax revenue

• Technology transfer

• Increasing choice

• National reputation

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 THANK YOU
- Sir James

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