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Ec3002 - Essay Example

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The globalization of economic activity and the integration of global markers are the two definitive features of the postmodern economic reality. In these globalizing conditions, multinational…
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Ec3002

in several distinct ways: they increase the flow of Foreign Direct Investments, speed up the internationalization of knowledge transfer, improve and increase international trade and globalize R&D activities.
Generally, a multinational enterprise “that engages in foreign direct investment (FDI) and owns or, in some way, controls value-added activities in more than one country” (Dunning & Lundan 3). This definition, however, is subject to considerable criticism, for scholars in economic studies seek to distinguish between multinational enterprises that participate in “foreign-owned production and those that have increased overseas commitments” (Dunning & Lundan 3). Nevertheless, these deviations in the definition of multinational enterprises does not have anything to do with the role which MNEs play in the processes of globalization. It would be fair to say that MNEs have already turned into the essential components of the daily economic routine. MNEs play one of the dominant roles in competitive markets and are not the last drivers of globalization in the world. MNEs increase and speed up globalization via increased foreign direct investments (FDI), increased knowledge transfer, growth of the international trade, and internationalization of R&D activities.
Foreign direct investments (FDI) have already become an essential feature of the deepening economic globalization. The integration of global markets and the growing number of MNEs reflect in ever rising FDI flows (Markusen & Venables 185). The second half of the 1980s was marked with the rapid advancement of the international FDI opportunities which, obviously, became the starting point of what we currently know as globalization (Markusen & Venables 186). During the six consecutive years, the worldwide stocks of FDI almost doubled and continued to grow during the 1990s (Markusen & Venables 187). Such increase in FDI is easy to explain by the growing number of MNEs, which seek to invest their resources ... Read More
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