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Cover Global Political Economy

7. The Globalization of Production  

Eric Thun

This chapter addresses the globalization of production. Although companies have been investing abroad for centuries, the most recent era of globalization has created an unprecedented range of possibilities for global firms to reorganize and relocate their activities. The chapter analyses how advances in transportation and technology allow a firm to divide up a global value chain — the sequence of activities that lead to the production of a particular good or service — and how these decisions create new opportunities and challenges for both companies and the societies within which they operate. It first reviews the rise of global production and the forces that have led to dramatic increases in foreign direct investment (FDI) and outsourcing. The central questions for any firm involved in global production involves how to govern the value chain and where to locate different activities. The chapter then provides a framework for understanding these issues and the implications of the various choices. It also applies these concepts to the case of East Asia, particularly China.

Chapter

Cover Global Political Economy

10. The Logics of Economic Globalization  

Anthony McGrew

This chapter provides a systematic account of the causes of economic globalization. Within the global political economy (GPE) literature, economic globalization tends to be more precisely specified as ‘the emergence and operation of a single, worldwide economy’. This assists its measurement by reference to the intensity, extensity, and velocity of worldwide economic flows and interconnectedness, from trade, through production and finance, migration to information and data. Understood as a historical process, the concept of economic globalization also infers an evolving transformation or evolution in the organization and operation of the world economy. The chapter then reviews the principal theories of economic globalization, drawing upon the GPE literature. It develops a multi-theoretic account of economic globalization which captures its structural, conjunctural, and contingent causal factors. The chapter also demonstrates how this multi-theoretic framework is relevant to understanding the current crisis of economic globalization. It considers whether, in the aftermath of the Global Financial Crisis, this crisis is the precursor to a period of accelerating deglobalization.