Global Business Today: Asia-Pacific Perspective 5th edition by Charles W. L. Hill Solution manual

 
Lecture note: For an overview of the outlook in Europe by 2014, see:
http://www.goldmansachs.com/our-thinking/archive/2014-outlook-europe-index.html
The journal Emerging Markets also includes some interesting articles of relevance:
www.kentlaw.edu/faculty/rwarner/classes/emergingmarkets.
 
Teaching tip: The efficacy of the interventions undertaken by the governments of Australia, the USA, the UK and Germany during the 2007–09 GFC provides a rich source of debate about an appropriate role of government in a market-capitalist model and the possible impacts on international business and the progress of globalisation in general. Such debate has spawned investment protectionist sentiment. Will this spell the will to de-globalise and re-orient economies away from global markets and global production chains? Time will tell. For now, this leads logically into the next section on the globalisation debate.
 

The globalisation debate

 
A) Is the shift towards a more integrated and interdependent global economy a good thing? While many economists, politicians and business leaders seem to think so, globalisation is not without its critics. Globalisation stimulates economic growth, raises the incomes of consumers and helps to create jobs in all countries that choose to participate in the global economy. Yet there is a rising tide of opposition to globalisation.
 
Anti-globalisation protests
B) Since 1999, when protesters against globalisation targeted the WTO meeting in Seattle, anti-globalisation protesters have turned up at almost every major meeting of a global institution. Protesters fear that globalisation is forever changing the world in a negative way. However, despite their protests, most citizens seem to welcome the higher living standards that progress brings.
 
Lecture note: Oxfam’s website, and particularly its Policy and Research section, is a rich source of material critiquing globalisation from a development perspective (www.oxfam.org/en/research). The IMF’s quarterly magazine Finance and Development also includes articles that canvass issues relating to globalisation and the conditions for positive development outcomes
(www.imf.org/external/pubs/ft/fandd/fda.htm).
 
Globalisation, jobs and income inequality
 
C) In developed countries, labour leaders lament the offshoring of well-paying jobs to low-wage countries. However, supporters of globalisation argue that free trade will result in countries specialising in the production of those goods and services that they can produce most efficiently, while importing goods and services that they cannot produce as efficiently. Free-trade advocates suggest that despite some job dislocation, the whole economy is better off with free trade, and that jobs are created through increased exports. They make a similar argument to support the outsourcing of services such as call centres to low-wage countries. The income gap between high-wage and low-wage jobs has increased over time, but there is no clear evidence that this growing inequality is due to globalisation.
 
Teaching tip: There is a significant part in this section that can be emphasised, which is about offshoring jobs to other parts of the world. The net effect on jobs from offshoring results in two opposing effects: the ‘relocation’ effect and the ‘scale’ effect. When jobs are offshored, such as back-office bank jobs, this is the relocation effect. When this move results in greater productivity and efficiency, this is regarded as the scale effect. It’s an entanglement issue, because it’s difficult to predict which tasks are likely to be ‘offshoreable’ or ‘onshoreable’ and whether the desired results will ever be realised.
 
Globalisation, labour policies and the environment
 
D) A second source of concern is that free trade encourages companies from advanced nations to move manufacturing facilities offshore to less-developed countries that lack adequate regulations to protect labour and the environment from abuse by unscrupulous multinational enterprises (MNEs)—‘a race to the bottom’ in terms of regulatory practices and standards. Globalisation has also been seen as a cause of global warming and climate change. Critics argue that it is a force of rapid, carbon-fuelled economic growth. Supporters of free trade and greater globalisation express serious doubts about these scenarios. They point out that tougher environmental regulation and stricter labour standards go hand in hand with economic progress. In general, as countries get richer, they enact tougher environmental and labour regulations.