Globalisation and Development

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The Comparative Inclusive Human Development of Globalisation in Africa

The Comparative Inclusive Human Development of Globalisation in Africa

This study examines the impact of globalisation on inclusive human development in 51 African countries for the period 1996-2011 with particular emphasis on income levels (low income versus middle income), legal origins (English common law versus French civil law), resource wealth (oil-rich versus oil-poor), landlockedness (landlocked versus unlandlocked), religious domination (Christianity versus Islam) and political stability (stable versus unstable). The empirical evidence is based on instrumental variable panel Fixed effects and Tobit regressions in order to control for the unobserved heteroegeneity and limited range in the dependent variable. Political, economic, social and general globalisation variables are used. Six main hypotheses are investigated. The findings broadly show that middle income, English common law, oil-poor, unlandlocked, Christian-oriented and politically-stable countries are associated with comparatively higher levels of globalisation-driven inclusive human development. Puzzling findings are elucidated and policy implications discussed.
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Financial globalisation uncertainty/instability is good for financial development

Financial globalisation uncertainty/instability is good for financial development

Developing countries that had been experiencing surges in foreign capital flows have had to also experience a decline in the same capital flows during the recent global financial crisis 1 (Kose et al., 2011). Uncertainty in financial flows has resurfaced the longstanding debate about whether the advantages of recent financial engineering far outweigh their development inconveniences (Rodrik & Subramanian, 2009). In essence, the rewards of financial globalisation to developing countries remain an open debate. While moderate consensus has been established on the rewards of trade globalisation (Asongu, 2014a), benefits from financial globalisation remain very conflicting, with a post 2007-2008 financial crisis strand of the literature substantially documenting the downsides of complete capital account openness, inter alia: Kose et al. (2011) on the risk of financial globalisation without solid domestic initial conditions; Prasad and Rajan (2008) on the imperative of incorporating country-specific features and Asongu and De Moor (2015) on the relevance of financial globalisation thresholds for positive domestic development outcomes.
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A COMPARATIVE STUDY OF THE IMPACT OF GLOBALISATION ON THE DEVELOPMENT OF BANGLADESH AND TANZANIA

A COMPARATIVE STUDY OF THE IMPACT OF GLOBALISATION ON THE DEVELOPMENT OF BANGLADESH AND TANZANIA

There have been a larger number of flows between countries that have participated in the most recent period of globalisation, which has resulted in greater integration between these countries. Hoogvelt (2001) refers to this as ‘thickening of the core’. Notably, not all countries have been able to equally participate in globalisation, specifically some groups of developing countries have not participated, or at least their participation has been substantially less than that of other countries. What has resulted from this unequal spread of activity is greater differences between the countries which have achieved a higher level of integration and those that have been largely by-passed the processes of integration. These differences are evidenced in aspects such as income, development and technological advancement. James (2002) likens participation in globalisation to Myrdal’s cumulative causation, in terms of setting of a spiralling effect of benefits, whereas not participating sets off a spiral effect of detrimental impacts. It is a matter of debate as to whether developing countries deliberately choose not to participate or whether there are factors beyond their control. This is also explored later in the chapter, however, it is suffice to say that a country’s ability to engage in the process of globalisation may be limited by a variety of external factors which the country is unable to influence. There are domestic factors which are controllable and impact the extent to which a country is able to participate in international economic activity.
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Financial globalisation and human development

Financial globalisation and human development

This paper will provide analysis and evidence on many of the above questions and, as noted earlier, also discuss policy implications for human development. In the international macro-economic discussion of the various aspects of financial globalization special attention will be given to the 2008-2010 global economic crisis. A significant part of the literature tends to blame the recent economic and financial crisis on financial globalization. The present paper contributes by departing from this view and suggesting that financial liberalisation has positive as well as negative effects on the world economy, both of which should be taken into account in arriving at a balanced picture of the phenomenon. The policy challenge lies in creating institutional frameworks which can harness the positive features of this inherently powerful phenomenon. It will be argued here that in principle, under the right conditions financial globalisation can induce faster economic growth, reducing world poverty and promoting sustainable human development. The latter positive effects of financial globalization tend to be ignored in much of the literature which thereby provides an unbalanced view of the effects of financial globalization. The paper also makes a contribution by its explicit analysis of the micro-economic and mesa- economic aspects of financial globalisation which are often neglected in many analyses of the subject.
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Assessing marginal, threshold and net effects of financial globalisation on financial development in Africa

Assessing marginal, threshold and net effects of financial globalisation on financial development in Africa

The present inquiry contributes to extant literature by simultaneously accounting for variations in financial development and financial globalisation in the assessment of hypothetical initial financial development conditions for the rewards of financial globalisation. For this purpose, we examine marginal, threshold and net effects of financial globalisation on financial development throughout the conditional distributions of financial development. The empirical evidence is based on contemporary and non-contemporary quantile regressions with data from 53 African countries for the period 1996-2011. Financial globalisation is measured with Net Foreign Direct Investment inflows whereas financial development entails all dimensions identified by the Financial Development and Structure Database of the World Bank. The findings consistently reveal: (i) positive marginal effects, (ii) unfeasible financial globalisation positive thresholds and (iii) negative financial globalisation net effects. The second and third findings are fundamentally due to marginal effects of low positive magnitude. Policy implications are discussed.
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Trend of Legal Globalisation and Stock Market Development

Trend of Legal Globalisation and Stock Market Development

Gone are the days of state investment in a mixed economic framework. New mantra of the present day world under the so-called Washington Consensus is liberalization, privatization and globalisation (LPG). Countries that already have a large public sector are advised to privatize by selling shares of the public sector to private individuals and/or companies. The role of government is to provide a proper legal framework under which stock market can flourish and provide the necessary private finance for capital formation and growth. One aspect of this is to provide an adequate protection of the rights of the shareholders under the aegis of corporate governance. Since the end of the 1980s or the beginning of the 1990s, both the developed and the less developed countries have been trying to improve their laws relating to shareholder protection. Apart from the capitalist ethics concerning property rights there is a concern for stock market development for the sake of capital accumulation and growth.
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Inclusive human development in pre crisis times of globalisation driven debts

Inclusive human development in pre crisis times of globalisation driven debts

The dependent variable is the inequality adjusted human development index (IHDI). Though it was first published in 2010, data on it is available from 1970 (Asongu, 2014b, p. 464). Financial liberalisation and trade openness variables are respectively: foreign direct investment (FDI) and trade openness. While the theory proposed by the underlying study (Azzimonti et al., 2014) is limited to financial liberalisation, we use trade openness and globalisation (FDI and trade) to improve subtlety of the analysis. Four main debt indicators were used: debt outstanding & disbursed (DOD), debt on concessional terms (DC), debt on non-concessional terms (DNC) and debt forgiveness or reduction (DFR). It should be noted that DOD= DNC+DC. The control variables are: Gross Domestic Product (GDP) growth, financial depth, tertiary school enrolment, mobile phones subscriptions and government effectiveness. Due to space constraint we justify and discuss the expected signs of control variables concurrently with the findings in Section 3. Definitions of these variables and corresponding summary statistics are presented in Panel A of Appendix 1.
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Financial globalisation and human development

Financial globalisation and human development

This paper is concerned essentially with the question, how does financial globalisation affect economic welfare? Orthodox theory suggests that because of greater risk-sharing between countries that financial liberalisation entails, there should be no welfare losses. Greater risk sharing should lead to greater smoothing of consumption and/or growth trajectories for developing countries. Yet there is widespread evidence of crises following liberalisation. Apart from these international macro-economic issues, it is argued here that financial globalization changes the very nature of capitalism from managerial to finance capitalism. This profoundly affects at the micro-economic level corporate governance, corporate finance and income distribution. Both macro- and micro-economic factors outlined here influence human development.
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Pre  and post crisis dynamics of financial globalisation for financial development in Africa

Pre and post crisis dynamics of financial globalisation for financial development in Africa

First, consistent with Asongu and De Moor (2015), threshold effects from financial globalisation run both ways. Hence, negative (due to decreasing marginal effects) and positive (from increasing marginal impacts) thresholds may be expected depending on whether the effect of financial globalisation on financial development engenders economies or diseconomies of scale. In essence, economies (diseconomies) of scale results in positive (negative) thresholds from positive (negative) marginal effects. A hypothetical increasing return derives from either external economies of scale (financial externalities) or internal economies of scale (financial internalities). We are more concerned about the former because a FDI inflow is conceptually an external factor to domestic financial development 5 . An interesting literature on positive marginal effects on the financial sector as a result of growing financial integration has been documented by Wen and Zhou (2012). The authors have attributed increasing marginal effects from financial globalisation to be the result of improvements in a plethora of factors, namely: wages, technology levels, social welfare and interest rate received by depositors. According to McCombie and Spreafico (2014, p.18), external economies are also the outcome of growing competition in the underlying industry. It follows that the perspectives of Spreafico (2014) and McCombie and Spreafico (2014) intersect on the position that financial competition from financial globalisation may either be a source of efficiency (economies) or inefficiency (diseconomies) in domestic financial development.
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Financial globalisation dynamic thresholds for financial development: evidence from Africa

Financial globalisation dynamic thresholds for financial development: evidence from Africa

The study in the literature closest to the current paper is Asongu (2014). Therefore, we devote space to clarifying how the positioning of this line of inquiry steers clear of underlying study. Significant differences that advance the extant of knowledge in the debate are at least fourfold, namely: (i) underpinning hypothesis and threshold variable, (ii) conception of threshold, (iii) sample and periodicity and (v) methodology. First, the underlying hypothesis on threshold for the benefit from financial globalisation is indirect because it focuses on financial globalisation instead of financial development. Second, the conception and definition of threshold are aligned with a cut-off point in the financial globalisation variable. In essence, a financial development threshold in Asongu is established based on consistent significance of financial globalisation with either increasing positive magnitude or decreasing negative magnitude, throughout the conditional distribution of financial development. Third, on the sample and periodicity, whereas, the underlying paper is limited to 15 African countries for the period 1996-2009, we focus on 53 African countries for the period 2000-2011. Fourth, contrary to quantile regressions which involve assessing the relevance of financial globalisation throughout the conditional distributions of financial development dynamics, we employ an endogeneity-robust Generalized Method of Moments (GMM) with forward orthogonal deviations as opposed to differencing. In order to avail room for more policy implications, we further condition the investigated nexus on above- and below-median levels of financial globalisation.
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Globalisation and Socio-economic Development in Malaysia: Wither Small Businesses?

Globalisation and Socio-economic Development in Malaysia: Wither Small Businesses?

Another important observation made in the study which can be linked to cultural homogeneity was the shift in commercial property development to more modern up-market architecture (recall that The Kitchen was renovated into a trendy western-styled bistro). In turn this has possibly affected market behaviour such as increasing prices of goods and services at The Kitchen, as well as alienation of its traditional customers, which could have brought about its final closure several months after the renovation. In general, while such physical developments have benefited the Malaysian society in terms of better infrastructure and comfort, their intangible effects on certain segments of the population are sometimes negative, as evidenced in the case. The study also showed that in addition to changes in corporate values and practices, the effects of globalisation may also be felt via government policies. In particular, the renovation of the food court was in line with current economic programs towards redesigning Malaysia and making her more attractive to foreign visitors (Ninth Malaysia Plan, 2006).
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Competition, Competition Policy, Competitiveness, Globalisation and Development

Competition, Competition Policy, Competitiveness, Globalisation and Development

We now turn to the consideration of the case of the semi-industrial countries, many of which are now fairly advanced in industrial development, e.g. Korea, India, Brazil, Mexico. These countries have reasonably strong states with competent government machinery. However, economic theory suggests that, even for these economies, the US and UK types of competition policies may be inappropriate. A very important reason for this conclusion is that the essential focus of competition policy in advanced countries such as the US is the promotion of allocative efficiency and reduced prices for consumers (WTO 1997). However, from the standpoint of economic development, this perspective is too narrow and static. In order to raise their people's standard of living, a central objective of developing countries must necessarily be the promotion of long term growth of productivity. The pursuit of this objective of dynamic rather than static efficiency requires, among other things, high rates of investment. In a private enterprise economy, this necessitates encouragement of entrepreneurs' propensity to invest. However, the private sector's animal spirits are likely to be dampened if, as a result of competition, profits became too low, even if only temporarily.
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GLOBALISATION, GROWTH, IMPACT AND DEVELOPMENT OF MICRO FINANCE INSTITUTION IN INDIA

GLOBALISATION, GROWTH, IMPACT AND DEVELOPMENT OF MICRO FINANCE INSTITUTION IN INDIA

While financial services in India can be traced to the era of Kautilya in the fourth century BC the age of organized sector finance in India is generally acknowledged to have started with the Cooperative Credit Societies Act of 1904. The cooperative credit societies were based on the models of the German cooperative movement, in particular the Raiffeisen and the Schulze-Delitsch cooperatives. The objective of the Act was “to facilitate promotion of cooperative societies, for the promotion of thrift and self-help among agriculturists, artisans and persons of limited means.” To the extent that the wording of this objective could be applied tothe objects of many MFIs today, this Act is a true precursor to modern microfinance in the country.1The true expansion of financial services in India started with the nationalization of all banks in the country during the late 1960s. This was reinforced with the establishment of Regional Rural Banks (RRBs) in 1976,and directed credit became the mantra of the Indian financial sector. In the meantime, the cooperative sector infrastructure had developed through the creation of an apex banking structure at the district and state levels to ensure the smooth flow of capital in the cooperative system. Yet, the entire network of primary cooperativesin the country and the RRBs, established to meet the needs of the rural sector in general and the poor inparticular, has not proved to be successful. The cooperatives suffered from mismanagement, leadership by the privileged, and corruption, and were gradually smothered by state patronage and protection, in many cases including management by ill-motivated government-appointed persons. This article aims on the analysis of micro finance institutions in the development of Indian Economy in global perspective.
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"Globalisation determinants of export-led development of Ukrainian agricultural sector"

"Globalisation determinants of export-led development of Ukrainian agricultural sector"

The globalisation trends between 1990 and 2012 generally intensified export-led activities and agricultural sector saw an export-led growth. Over the past eight years, there is a tendency to increase in positive trade balance, and the diversified geographical structure of exports allows neutralising the risks of external markets. However, the country remains vulnerable in the world market due to its resource-based orientation, low competitiveness of Ukrainian goods – which is caused by poor technological support – and the intensive intra-industry trade. Export-led activities are being developed under the influence of low aggregate demand and price level in the domestic market.
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Globalisation and poverty

Globalisation and poverty

Globalisation has been one of the main factors contrib- uting to world growth over the last decades through an unprecedented wave of technology innovations and more efficient international division of labour. However, freer trade and increased foreign direct investment (FDI), as well as short-term capital flows have only a limited impact on global development. The missing link between globalisation and development is the lack of adequate domestic policies. Development depends first of all on domestic policies, although these should be supported by international economic co-operation.
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Globalisation and rural development in Africa: the case of the Chad Cameroon oil pipeline

Globalisation and rural development in Africa: the case of the Chad Cameroon oil pipeline

The process of globalisation is multifaceted. One is smiling and promising, the other looks less attractive, if not threatening. It is the process of growing interdependence of countries worldwide through the increasing volume of cross-border transactions in goods and services and of capital flows, and also through the more rapid and widespread diffusion of technology (The International Monetary Fund, 2001). It is bringing new ways of life and opportunities to the door steps of people in just about all parts of the world. The benefits of the process can be very uneven, with the strong getting stronger and the weak becoming weaker. Marginal groups such as women, the poor and the rural can be particularly affected, with little expectations for social and economic equality. Globalisation, as understood today, feeds on knowledge. Probably the most important source of inequality is the knowledge gap.
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Globalisation, labour Standards and economic Development

Globalisation, labour Standards and economic Development

When this chapter was originally written for the Handbook of Globalisation (Michie, 2003) the burning issue regarding labour standards was the attempt by advanced country governments and unions, particularly the US, to establish multilateral rules in the World Trade Organization (WTO) to enforce labour standards globally. This initiative did not succeed and the issues raised remain as relevant as ever, though they no longer command as much attention at the top of the international policy agenda. This slightly revised version therefore retains the basic structure of the arguments presented on labour standards in a developmental context. However, in view of the subsequent rise of China and India as major producers and exporters and the perception in the US that this presents a threat to its workers and industries alike, even the principal cause of its industrial and labour woes, this issue is briefly introduced here in an Addendum.
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Globalisation and sustainable development: the employment challenge

Globalisation and sustainable development: the employment challenge

The faster world economic growth may however run contrary to another concept of sustainability which many would regard as equally relevant: that is sustainability in terms of ecology, nature and environment. To be sustainable in this sense, the nature and character of economic growth will need to be different. The faster growth of world demand and production will have to be consistent with ecological concerns. This will require the North to recognise the South’s right to ecological space so that the South’s industrial and economic development is not hindered. Both the North and South will need to economise on scarce materials and increasingly produce products and introduce processes which do not damage the environment. To illustrate if the North were to reorient its production towards services, it may help both employment and environment. This is because many services (e.g. healthcare, education) are less energy-intensive, and also tend to have a higher elasticity of employment with respect to output.
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Globalisation and knowledge economy

Globalisation and knowledge economy

However, the origin of the TNCs is not the only application of the presently ongoing changes in the market subjects field. With the growing influence of information technologies in enterprising, there will probably occur a certain bi-polarisation in the sphere of firms, where on one side there will be just the global firms the influence of which reaches long and wide, and on there other side, there will be a certain form of small, highly specialised firms functioning with minimum costs in the environment of the global information net. The fact that these small firms will have almost no outside physical phenomena (offices, stocking places etc.) will give them the advantage of an enormous flexibility in reacting to the needs of their customers and to the market development, it will lower the costs of their origin as well as of their eventual liquidation.
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International political economy, the globalisation debate and the analysis of globalisation discourse

International political economy, the globalisation debate and the analysis of globalisation discourse

ideologies, but the term is nevertheless frequently invoked. Neo-Gramscianism clearly does not belong, unproblematically, in any of the theoretical camps classified in this chapter. As suggested above – and if the analysis of neo-Gramscianism provided in Chapter One – is correct, neo-Gramscianism may in fact be a close relative of the classical Marxist version of ‘hyperglobalisation’. Indeed, there is no doubt that neo-Gramscians such as Stephen Gill and Craig Murphy, in pioneering the development of IPE as a distinct discipline, did much to elevate the concept of globalisation, as a reading of material structural change, to its current status in the discipline. Nevertheless, it is presented by Ian Bruff (2005) as an alternative ‘third wave’ approach. Bruff resists depicting neo-Gramscianism as a ‘fourth wave’ – which in any case would surely contort the wave thesis beyond repair – and instead finds common ground with Hay’s contribution to the globalisation debate. He welcomes the focus on the ideational dimension of globalisation, and the argument that certain (elite) actors bring about globalisation by acting – whether sincerely or not – as if it already exists. However, he has two main problems with ‘third wave’ theorising: first, its foundation in the ‘second wave’ (which Cameron and Palan would actually agree with). There is, according to Bruff, a ‘global capitalist order’. Second, Bruff argues that the ‘third wave’ has travelled too far in the direction of post-structuralism and the apparently misguided notion that ‘all is narrative’ (which Hay would actually agree with, assuming Bruff is correct). As such ‘neo-Gramscian theory can overcome the shortcomings of the otherwise praiseworthy third wave’ (Bruff 2005: 261). This section will therefore discuss the work of three scholars associated with neo- Gramscianism that have contributed to analysis of the ideational dimension of globalisation: Mark Rupert, James Mittelman and Andreas Antoniades.
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