UNIT 2.2 - Market Integration & UNIT 2.3 - The Global Interstate System

Hedley Bull

, a 20th century international philosopher stated that states are independent political communities each of which possesses a government and asserts sovereignty in relation to a particular portion of the earth's surface and a particular segment of the human population.

Thomas Friedman

, a neoliberalism journalist and advocate, to illustrate the forcing of states into policies that suit the preferences of investment houses and corporate executives (Electronic Herd) who swiftly move money and resources into countries favored as adaptable to the demands of international business and withdraw even more rapidly from countries deemed uncompetitive.

New Institutionalism

- This theory emphasized the importance of institutions in the process of European integration. Its three key strands are: rational choice, sociological and historical.

European integration

- is the process of industrial, political, legal, economic, social and cultural integration of states wholly or partially in Europe

Financing

A group's tax bill can be reduced by the CFO like borrowing in countries with high tax rates and lending to operations in countries with lower rates.

Capital budgeting

Getting smarter on valuing investment opportunities CFOs can add value.

Risk Management

Global firms can offset natural currency exposures through worldwide operations instead of managing currency exposures through financial markets.

Financial Market Integration

It is an open market economy between countries facilitated by a common currency and the elimination of technical, regulatory and tax differences to encourage free flow of capital and investment across borders.

Westphalian Sovereignty

It is based on the principle that one sovereign state should not interfere in the domestic arrangements of another.

Interdependence Sovereignty

It is the capacity and willingness to control flows of people, goods and capital into and out of the country.

Domestic Sovereignty

It is the capacity of a state to choose and implement policies within the territory

International Legal Sovereignty

It refers to the acceptance of a given state as a member of the international community.

Common market

One major step towards economic integration

Customs union

Removal of tariff barriers between members, together with the acceptance of a common or unified external tariff against non-members

Golden Straitjacket

The belief that globalization imposes a forced choice upon states either to conform to free market principles or run the risk of being left behind

Economic union

The trading bloc that has both a common market between members, and a common trade policy towards non-members, although members are free to pursue independent macro-economic policies

Liberal Intergovernmentalism

This a dominant political theory developed by Andrew Moravsik in 1993 to explain European integration. Application of rational institutionalism to the field of European integration is the aim of this theory.

Stock Market Integration

This is a condition in which stock markets in different countries trend together and depict same expected risk adjusted returns.

Multi-level Governance (MLG)

This is a new theory of European integration. Writers Liesbet Hooghe and Gary Marks defined MLG as dispersion of authority across multiple levels of political governance

Neo-functionalism

This theory focuses on the supranational institutions of the EU of which the main driving forces of integration are interest group activity at the European and national levels, political party activity, and the role of governments and supranational institutions.

Intergovernmentalism

This theory provides a conceptual explanation of the European integration process. The main concept of this is emphasizing on the role of national states in the European integration; in another words it argues that "European integration is driven by the interest and actions of nation states"

Max Weber

a German social theorist define state as a compulsory political organization with a centralized government that maintains a monopoly of the legitimate use of force within a certain territory.

Transnational activism

can be defined as the mobilization of collective claims by actors located in more than one country and/or addressing more than one national government and/or international governmental organization or another international actor.

Economic integration

can be described as a process and a means by which a group of countries strives to increase their level of welfare. It is an arrangement between different regions that often includes the reduction or elimination of trade barriers, and the coordination of monetary and fiscal policies

Free trade area or Preferential Trade Agreements (PTAs)

eliminate import tariffs as well as import quotas between signatory countries. These agreements can be limited to a few sectors or can encompass all aspects of international trade.

Market integration

exists when there are exerted effects that prompt similar changes or shifts in other markets that focus on related goods on events occurring within two or more markets.

Preferential trading area (PTA)

happens when there's an agreement on reducing or eliminating tariff (tax or duty to be paid on a particular class of imports or exports) barriers on selected goods imported from other members of countries within the geographical region or areas.

Economic and monetary union

involves a single economic market, a common trade policy, a single currency and a common monetary policy. It represents a major step in the integration of EU economies

global corporation

is a business that operates in two or more countries. It also goes by the name "multinational company".

Social media

is a computer-based technology that facilitates the sharing of ideas and information and the building of virtual networks and communities.

social movement

is a type of group action. It refers to the organizational structures and strategies that may empower oppressed populations to mount effective challenges and resist the more powerful and advantaged elites".

BRICS

is an acronym for the combined economies of Brazil, Russia, India, China and South Africa. BRIC, without South Africa, was originally coined in 2003 by Goldman Sachs, which speculates that by 2050 these four economies will be the most dominant. South Africa was added to the list on April 13, 2011 creating "BRICS"(64a). These five countries were among the fastest growing emerging markets as of 2011.

European Union (EU)

is an international organization comprising 28 European countries and governing common economic, social, and security policies.

new transnational activism

is as multifaceted as the internationalism.

Complete economic integration

is the final stage of economic integration in which member states completely forego independence of both monetary and fiscal policies.

General Agreement on Trade in Services (GATS)

is the first multilateral agreement covering trade in services which was negotiated during the last round of multilateral trade negotiations, called the Uruguay Round, and came into force in 1995.

Neoliberalism

is the intensification of the influence and dominance of capital. It is the elevation of capitalism as a mode of production into an ethic, a set of political imperatives, and a cultural logic.

Economic sovereignty

is the power or national governments to make decisions independently of those made by other governments.

global justice movement

movement describes the loose collection of individuals and groups often referred to as a "movement of movements", who advocate fair trade rules and are negative to current institutions of global economics such as the World Trade Organization.

Chief financial officers (CFOs)

must balance the opportunities with the challenges of operating in multiple environments in managing their internal markets in building an advantage.

methods to establish FDIs

opening a subsidiary or associate company in a foreign country; acquiring a controlling interest in an existing foreign company, or by means of a merger or joint venture with a foreign company

Market integration

refers to how easily two or more markets can trade with each other. It occurs when prices among different locations or related goods follow similar patterns over a long period of time.

Political integration

refers to the integration of components within political systems; the integration of political systems with economic, social, and other human systems; and the political processes by which social, economic, and political systems become integrated

Foreign Direct Investment (FDI)

was of corporate origin. It is a major driver of extended global corporate development. It is an investment made by a company or individual in one country in business interests in another country, in the form of either establishing business operations or acquiring business assets in the other country, such as ownership or controlling interest in a foreign company and the key feature of foreign direct investment is that it is an investment made that establishes either effective control of, or at least substantial influence over, the decision making of a foreign business.