GLOBALIZATIONGLOBALIZATION

BY BY Vivek Prakash Vivek Prakash

Video: Emerging Powers: India • What did you find informative about this film?

• What is the basic argument that the film presents about India and about globalization?

• How does the film interpret such things as India’s widespread poverty and its periodic flare-ups of ethnic and religious strife?

• Why are India and China so important?

“Globalization in its current phase has been described as an unprecedented compression of time and space reflected in the tremendous intensification of social, political, economic, and cultural interconnections and interdependencies on a global scale.”

Stegler, p. ix

• time-space compression

• deterritorialization and supraterritoriality

One way to approach this: think about the world before globalization

• Distance mattered—space often measured in time

• Territorial boundaries more or less kept things in and out

• Society and culture had spatial referents

• Everything had its “place” (literally)

In a world of deterritorialization and supraterritoriality:

•Distance becomes almost irrelevant (the end of distance)

•Boundaries are increasingly permeable.

•Groups and cultures increasingly don’t have a territorial basis

•A new kind of non-physical “place” is emerging

Bosworth and Gordon: A survey of some key processes of globalization

• Technological advances

• Expansion of international commerce (exports and imports)

• Rising importance of private capital flows (stock markets and multinational corporations)

• Increasing travel and migration (international tourism and domestic diversity)

• Increased communication and interaction between peoples (through all sorts of media)

Bosworth and Gordon also point to some of the key public controversies over globalization:

What are they?

“Can globalization be harnessed so that all citizens and countries benefit and not just the lucky few?”

Frank Lechner: Empirical Debates1. Process vs. Project

2. New Era vs. Nothing New (Globabaloney)

3. Hard vs. Soft

4. End vs. Revival of Nation State

5. Cultural Sameness vs. Difference

1. 1. Is globalization Westernization? Is it a threat to non-western societies?

2. What is the right question to ask about globalization and the poor?

3. What are the “legitimate” questions that “anti-globalization” protestors ask?

Amartya Sen: How to Judge Globalization (Normatively)

“Our global civilization is a world heritage... The idea of an immaculate Western conception is an imaginative fantasy.”

“Globalization has much to offer, but even as we defend it, we must also, without any contradiction, see the legitimacy of many questions that the antiglobalization protestors ask.”

“The world powers bear an awesome responsibility for helping in the subversion of democracy in Africa and ofr all the far-reaching negative consequences of that subversion.”

“Over the past decade globalization has been driven by technological advances…..But globalization has also been driven by policies and ideas…”

Bosworth & Gordon

Next time: globalization as a neoliberal project

Copyright NUS Business School 2008

Performance of acquisitionsPerformance of acquisitions We used an event study methodology

► Sample - Indian companies had cross- border acquisitions during 2002-2006.

►224 transactions: 127 different companies from 33 industries.

► We used BSE-500 (represents nearly 93% of the total market capitalization on Bombay Stock Exchange Limited) as the market index for the calculations.

Calculating CAR►Used the following formula to calculate the abnormal

returns -

►The CAR was calculated using the following formula -

α ^

β ^

ARit = Rit - i- i Rmt, (t = -7 to t= +7)

CARi =t = -7

t = +7ARit

Copyright NUS Business School 2008

SummarySummaryAcquisitions a prominent part of OFDI from India

► Good distribution across industries and regions ► Achieving an increased prominence, strong growth► Important component to OFDI and strategy of MNCS

from India

Strategy and performance► Performance strong on an absolute and a comparative

basis► Several market expansion motives related to good

performance► Market clearly rewarding international expansion

strategy of Indian firms► Need comparative analysis to other modes► Need deeper analysis of strategy and performance of

acquisitions