Market
Integration
MARKET
A market is one of the many varieties
of systems, institutions, procedures, social
relations and infrastructures whereby parties
engage in exchange. While parties may
exchange goods and services by barter, most
markets rely on sellers offering their goods or
services (including labor) in exchange
for money from buyers. It can be said that a
market is the process by which the prices of
goods and services are established.
MARKET INTEGRATION
Market integration occurs when prices
among different locations or
related goods follow similar patterns over
a long period of time. Groups of good
often move proportionally to each other
and when this relation is very clear among
different markets it is said that the
markets are integrated. Thus market
integration is an indicator that explains
how much different markets are related
to each other.
INTERNATIONAL
FINANCIAL
INSTITUTIONS
“When the American economy
sneezes, the rest of the world
catches a cold.”
INTERNATIONAL FINANCIAL
INSTITUTION
An international financial institution (IFI)
is a financial institution that has been
established (or chartered) by more than
one country, and hence are subjects
of international law.
Its owners or shareholders are generally
national governments, although
other international institutions and other
organizations occasionally figure as
shareholders.
MULTILATERAL DEVELOPMENT
BANK
A multilateral development bank (MDB) is an
institution, created by a group of countries,
that provides financing and professional
advising for the purpose of development. MDBs
have large memberships including
both developed donor countries
and developing borrower countries. MDBs
finance projects in the form of long-term loans
at market rates, very-long-term loans (also
known as credits) below market rates, and
through grants.
MAIN MDBs:
World Bank
International Fund for Agricultural Development (IFAD)
European Investment Bank (EIB)
Islamic Development Bank (IsDB)
Asian Development Bank (ADB)
European Bank for Reconstruction and
Development (EBRD)
CAF - Development Bank of Latin America (CAF)
Inter-American Development Bank Group (IDB, IADB)
African Development Bank (AfDB)
Asian Infrastructure Investment Bank (AIIB)
GLOBAL COMPANY
A global company is generally referred to
as a multinational corporation (MNC). An
MNC is a company that operates in two or
more countries, leveraging the global
environment to approach varying markets
in attaining revenue generation. These
international operations are pursued as a
result of the strategic potential provided
by technological developments, making
new markets a more convenient and
profitable pursuit both in sourcing
production and pursuing growth.
Characteristics of Global
Corporations
An international company has no
foreign direct investment and
makes its wares only in its home
country. Its involvement outside its
borders is essentially limited to
importing and exporting goods.
A multinational company invests directly
in foreign nations, but this is usually
limited to a few areas. Products are
customized to local preferences, rather
than homogenized, limiting the ability to
create economies of scale.
Transnational companies take the global
corporation a step further. A
transnational company invests directly in
dozens of countries and distributes
decision-making capabilities to its various
local operations.
McDonalds - USA
McDonalds - Philippines
Examples of
MNCs
(Multinational
Companies)
10. Toyota
9. China National Petrolium
8. Sinopec Group
7. State Grid Corporation
6. Walmart
5. Kimberly Clark
4. Fedex
3. Microsoft
2. Volkswagen
1. Apple Inc.
ACTIVITY:
A.) Choose 1 Multinational company
B.) Research the origin and history of
the institution you have chosen;
C.) Map the international connections
it has created;
D.) Identify the major country-leaders
of this institution;
E.) Locate the Philippines in this map
of interconnections
Then, answer this question:
How does this institution
influence global economic
activity?
How does it affect economics
in the Philippines?
