Einheit 1

• Globalization


  The unprecedented international connectivity of the post Cold War World, involving goods, services, data, technology and economic resources of capital
• Globalization


  • Can be viewed as positive or a negative phenomenon
• Drivers of globalization


  • Technology
  • Economics
  • Politics
  • Social
  • Cultural
  • Ecological
• Technology


  Innovations like telephones, telegraphs, advancements in transportation (cargo containers, airplanes, ships)
• Economics


  Liberalization of world trade through agreements like GATT, WTO and Uruguay round; market deregulation allowed companies to operate efficiently on a global scale
• Politics


  Increased mobility of companies and international business activities heightened competition among countries to create favorable business environments; competition constrained countries in regulating business activities, limiting their sovereignty and affecting their ability to pursue national interests
• Social


  Globalization led to a debate on its impact on overall wealth and divergence between industrialized and developing countries; Income per capita disparities increased, leading to social divergence within countries, prompting protectionism, as seen in Brexit
• Cultural


  Cultural convergence toward a global culture was driven by increased worldwide mobility of people, information, and products; While national traditions still matter, factors like age, job, and lifestyle gained prominence, sparking discussions on the emergence of a unified global culture
• Ecological


  Globalization has contributed to ecological challenges, including pollution, ozone depletion, and the greenhouse effect. The rising demand for fossil fuels has led to environmental disruptions, necessitating global initiatives like the Earth Summit, Kyoto Protocol, and Paris Agreement to address climate change
• The German Hanse gained tremendous wealth by means of trade in the Baltic Sea area in the 12th-17th century
• The Hanse had no constitution, register of members, mutual finances, or officials
• Success of German Hanse


  Based on deeply rooted common norms and values (first example of a successful corporate culture)
• Reasons for the rise of MNEs

  • Technological innovations
  • Liberalization
  • Stock Corporation Law
• After WWII, the Bretton Woods Agreement established a system of fixed exchange rates with the US Dollar as a leading currency
• In 1973, the obligation to exchange gold was canceled, leading to the collapse of the Bretton Woods System
• After WWII, the WTO formed the Institutional Framework for Trade between the economically Most Powerful Nations
• GATT


  A multilateral agreement with the aim to promote international trade by reducing or eliminating trade barriers, established in 1947 (1948 effectively in power), after World War II
• GATS


  Facilitates the expansion of trade in services while respecting the regulatory autonomy of member countries, covering a wide range of services, established as part of the Uruguay Round negotiations that led to the creation of the WTO in 1995

  
• TRIPS


  Harmonises intellectual property standards internationally, covering a wide range of intellectual property rights such as patents, copyrights, trademarks, trade secrets, and industrial designs, established as part of the Uruguay Round negotiations that led to the creation of the WTO in 1995

  
• Trade Agreements


  International trade deals between two or more countries designed to enhance economic cooperation and reduce trade barriers through cost-effective trade and measures beyond trade
• CETA


  A bilateral trade agreement between the EU and Canada that aims to liberalize trade by reducing or eliminating tariffs and other barriers, providing increased market access, promoting regulatory cooperation, and including provisions for investment protection
• EU-MERCOSUR Association Agreement


  A bilateral trade agreement between the EU and MERCOSUR members (Argentina, Brazil, Paraguay and Uruguay) that aims to establish a comprehensive partnership and free trade area, including the reduction or elimination of tariffs and trade barriers, improved market access, and the alignment and mutual recognition of standards and regulations
• NAFTA


  A multilateral trade agreement between Canada, USA, and Mexico that came into effect in 1994 and aimed to eliminate barriers to trade and investment between the three North American nations, which was later superseded by the United States-Mexico-Canada Agreement (USMCA) in 2020
• Historical periods of European international business

  • Since 500 BC: Cross-border Economic Activities
  • Age of Exploration (15th to 18th Century): Global explorations and colonization
  • Industrial Revolution(18th to 19th Century): Technological advancement and surge in international trade
  • World Wars Impact (20th Century): Economic shifts and restructuring post-World Wars
  • European Integration(Mid-20th Century-): Formation and evolution of the European Union
  • Era of Globalization (Late 20th to Early 21st Century): European businesses play central role in global interconnectedness
• Present and future of Europe's international business

  • EU Influence: Central role of the Single Market and trade policies
  • Digital Shift: Europe embraces digital transformation
  • Green Transition: Initiatives under the European Green Deal for sustainability
  • Political polarization and tensions: Brexit, right-wing parties, geopolitical dynamics
  • Economic Recovery: Focus on digital and green investments
  • Sustainability Drive: Emphasis on renewable energy, circular economy, and sustainable finance
  • Supply Chain Strategy: Reconfiguration of supply chains for resilience
  • Trade Agreements: Strengthening and expanding for global access and setting standards
  • Innovation Focus: Leveraging technology and sustainability for competitiveness
• Present and future of South America's international business

  • Growing integration into global economy
  • Diverse sectors attracting multinational corporations
  • Persistent challenges: Inequality, corruption, environmental sustainability
  • Continued expansion of regional economic integration
  • Emphasis on sustainable development and responsible investment
  • Opportunities for innovation and diversification in emerging industries

  
• y Drive


  • Emphasis on renewable energy, circular economy, and sustainable finance aligned with the European Green Deal
• Supply Chain Strategy


  • Reconfiguration of supply chains for resilience (e.g., diversification, nearshoring)
• Trade Agreements


  • Strengthening and expanding for global access and setting standards on sustainability and digital trade
• Innovation Focus


  • Leveraging technology and sustainability for competitiveness
• South America - Present

  • Growing integration into global economy
  • Diverse sectors (technology and telecommunications, financial services, mining, manufacturing, agriculture, etc.) attracting multinational corporations
  • Persistent challenges: Inequality, corruption, environmental sustainability
• South America - Future

  • Continued expansion of regional economic integration
  • Emphasis on sustainable development and responsible investment
  • Opportunities for innovation and diversification in emerging industries
• Asia - Present


  • Technological Leadership: South Korea, Japan, and China at the forefront of innovation in AI and digital services
  • Trade Integration: Impact of CPTPP and RCEP on economic cooperation and market access
  • Sustainability Focus: Increased emphasis on sustainable development and ESG initiatives
• Asia - Future


  • Enhanced Regional Integration: Prospects for a more unified Asian market with significant global economic influence
  • Digital Economy Expansion: Significant growth expected in e-commerce, digital finance, and tech innovations
  • Innovation Drive: Surge in high-tech, green technology investments, positioning Asia as a global innovation leader
  • High-Value Manufacturing: Shift towards sectors like semiconductors and green technology
  • Geopolitical and Environmental Challenges
• History of International Business in Oceania

  1. Pre-Colonial Trade: Various indigenous peoples engaged in trade amongst themselves, mainly based on barter (exchange of goods)

  2. European Arrival (16th Century): Introduction of global trade routes, colonization (Britain, France, Germany) and the beginning of the shift in indigenous economies

  3. 19th to Early 20th Century: Expansion of European colonial economies with plantation systems (Fiji, Papua New Guinea), export of sugar, copra, wool, meat, and dairy, and the introduction of labor force from India and China

  4. Post World War 2 and Decolonization: Movement towards independence, emergence of new nation-states and reorientation towards diversified economies

  5. Late 20th Century to Present: Increased globalization and trade liberalization, emergence of regional trade agreements, Australia and New Zealand as exporters (minerals, coal), and smaller economies focusing on tourism and niche exports (e.g., bottled water from Fiji)
• Oceania - Present


  • Economic Powerhouses: Australia and New Zealand dominate with mining, agriculture, and services
  • Pacific Islands: Challenges due to small size, remoteness and vulnerability to climate change; dependency on few sectors such as tourism, agricultures, and fisheries
  • Sustainability Focus: Increased emphasis on combating climate change and promoting renewable energy
• Oceania - Future


  • Diversification: Efforts to broaden economic bases, especially in Pacific Islands through technology, creative industries, and green energy
  • Trade and Integration: Enhanced regional cooperation and global trade agreements
  • Climate Resilience: Investment in climate adaptation and sustainable resource management
• Africa - Present


  • Biggest Player: China has become a major trade partner, investor, and infrastructure developer in Africa
  • Foreign Direct Investment: Investment in telecommunications, mining, oil and agriculture (but: Benefits debated, concerns over resource exploitation, environmental degradation, and unequal economic partnerships)
  • Regional Integration: Initiatives like the African Continental Free Trade Area (AfCFTA)
  • Challenges: Political instability, corruption, inadequate infrastructure, regulations
• Africa - Future


  • Infrastructure Investment: Continued investment in transportation and energy
  • Diversification: Economies beyond reliance on natural resources, with a focus on sectors like manufacturing, services, and technology
  • Global Partnerships: Strengthening partnerships with emerging economies (China, India, Brazil) and traditional partners in Europe and North America
• Barriers to Trade


  • Trade and economic exchange are more likely and stronger between actors that are located close to each other
  • Closeness is often defined as in US-centric economic policy after WW2, dominated until the 1990s in terms of trade and FDI