Geography Reference
In-Depth Information
the relationships between MNEs and the parent nation state of the MNE,
and far more on the relationships between the power of nation states and
the power of the multinational transmission mechanisms driving globali-
zation forces. Notwithstanding the recent turmoil on global markets,
looking into the future it is possible on the basis of all of the material
presented in this topic to discern various patterns which suggest that the
trends identified here are likely to continue for many decades into the
future.
It is clear that the last few years have witnessed enormous turmoil on
world markets since the global financial crisis of 2008, and this has had a
significant and negative impact on global investment flows, and in particu-
lar on mergers and acquisitions, as did the Asian financial crisis of 1997.
However, in spite of such short- and medium-term fluctuations, there are
still four strong grounds for believing that the long term trends towards
increasing international investment and global interdependence will con-
tinue over the coming decades.
Firstly, the pace of technological progress implies that international
communication and transportation technologies are bound to be imp-
roved. These improvements are particularly rapid and marked in the
case of information and communications technologies. Advances to
long-distance transport technologies also continue, though it remains to
be seen to what extent developments in fuel efficiency and also transport
deregulation will be able to offset counteracting costs pressures deter-
mined not only by changes in the energy costs, but also by some form
of carbon pricing from which, at present, shipping and aviation fuels
remain exempt by international treaties. Secondly, over recent years
there has been enormous institutional change in favour of international
investment and cross-border exchanges, along with the emergence of new
multi-regional and supra-national arrangements for economic integration.
Thirdly, new forms of business organization which blend together hierar-
chical and network types of governance are spreading among firms other
than large MNEs. These often involve a growing number of business units
operating in a widening range of economic activities and functions, and
frequently often spanning across industry boundaries. All these techno-
logical, institutional and organizational changes point to the conclusion
that accessing greater geographical markets will continue to become easier
and easier for an increasing number of firms, thereby fostering further
rounds of globalization. Fourthly, the 1930s experience of the disastrous
consequences of trade protectionism are not lost on policy-makers, and
the imperative to maintain open markets internationally is widely shared
by almost all governments and international institutions. However, that is
not to say that the architecture of the global financial system should be left
