Geography Reference
In-Depth Information
changes in the nature of credit have led to distinct eras in the globaliza-
tion processes. As such, the Darien adventure (Schama 2006), the South
Seas Bubble, the abandonment of the Gold Standard, the 1930s liquidity
crisis, the 1960s rise of the Eurodollar markets, and the 1984 Big Bang in
London (Casson and McCann 1999), would all point to pivotal changes
in the eras of globalization, none of which are fundamentally about
either countries or companies. Other vantage points from which to view
the history of globalization, such as the history of the oil, transport and
energy industry, the history of technology, the history of the nation-
state, the history of imperialism, slavery, human rights, gender, culture,
politics, not to mention Marxist, structuralist or military histories, would
also suggest quite different critical break-points which define stages of
globalization.
From our perspective of multinationals and economic geography
there are three major aspects to the historical processes of globalization
that we need to consider. These are the relationship between countries
and globalization, between multinational firms and globalization, and
between regions, cities and globalization. In a sense, each of these issues
relates to the question of scale, and globalization is fundamentally a ques-
tion of scale. Yet, what exactly we mean by scale is itself not so obvious
when we consider the relationship between MNEs and globalization, and
the reason is that the existence of multinationals implies that factors are
able to move across national borders. The issue arises when we consider
the recent citation for Paul Krugman's 2008 Nobel Prize in economics.
Krugman's research focussed on two aspects of economies of scale. The
first aspect is the role played by economies of scale in determining the
nature and pattern of international trade in situations where production
factors are immobile between countries; the second aspect is the role
played by agglomeration economies in shaping the economic geography
of production in a situation where production factors are mobile between
locations. From the perspective of MNEs and globalization, these two
different aspects of economies of scale lead to another fundamental ques-
tion: in terms of economic performance, is the scale of a country more
important than the scale of a city (region) or is the scale of a city (region)
more important than the scale of a country? In order to deal with these
questions we need to understand the processes which have driven and
facilitated globalization historically. In the following sections we will
first consider the technological and institutional changes which have
driven globalization from a historical perspective from the early seven-
teenth century up until the late 1980s; then we will move on to discuss the
main transformations that have characterized the most recent phase of
globalization.
