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Financial Globalization,Growth, and Volatility in Developing Countries

Financial Globalization,Growth, and Volatility in Developing Countries
Financial Globalization,Growth, and Volatility in Developing Countries

This PDF is a selection from a published volume from the National Bureau of Economic Research

Volume Title: Globalization and Poverty

Volume Author/Editor: Ann Harrison, editor

Volume Publisher: University of Chicago Press

Volume ISBN: 0-226-31794-3

Volume URL: https://www.doczj.com/doc/4e9759261.html,/books/harr06-1

Conference Date: September 10-12, 2004

Publication Date: March 2007

Title: Financial Globalization, Growth and Volatility in Developing Countries

Author: Eswar S. Prasad, Kenneth Rogoff, Shang-Jin Wei,

M. Ayhan Kose

URL: https://www.doczj.com/doc/4e9759261.html,/chapters/c0114

11.1Introduction and Overview

The wave of ?nancial globalization since the mid-1980s has been marked by a surge in capital ?ows among industrial countries and, more notably, between industrial and developing countries. While these capital ?ows have been associated with high growth rates in some developing countries, a number of countries have experienced episodic collapses in growth rates and signi?cant ?nancial crises over the same period, crises that have ex-acted a serious toll in macroeconomic and social costs. As a result, an in-tense debate has emerged in both academic and policy circles about the e?ects of ?nancial integration on developing economies. But much of the debate has been based on only casual and limited empirical evidence. The objective of this paper is to provide an assessment of empirical evi-dence on the e?ects of ?nancial globalization for developing economies. The paper will focus on a couple of related questions: (a) does ?nancial Eswar S. Prasad is currently the Chief of the Financial Studies division of the research de-partment in the International Monetary Fund. Kenneth Rogo?is the Thomas D. Cabot Pro-fessor of Public Policy at Harvard University and a research associate of the National Bureau of Economic Research. Shang-Jin Wei is assistant director and chief of the Trade and Invest-ment division of the research department at the International Monetary Fund and a research associate and director of the National Bureau of Economic Research’s Working Group on the Chinese Economy. M. Ayhan Kose is an economist in the Financial Studies division of the re-search department of the International Monetary Fund.

We would like to thank Ann Harrison, Susan Collins, and the conference participants for their helpful suggestions. This paper is based on our earlier paper (Prasad et al. 2003). The views expressed in this paper are those of the authors and do not necessarily re?ect the views of the IMF or IMF policy.

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458Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose globalization promote economic growth in developing countries, and (b) what is its impact on macroeconomic volatility in these countries?

While this paper does not deal directly with poverty issues, its main sub-ject—the e?ects of ?nancial globalization on economic growth and vola-tility—has important indirect e?ects. First, as documented by several empirical studies, economic growth has been the most reliable source of poverty reduction. Moreover, in theory, there are several channels through which increased ?nancial ?ows could help reduce poverty. As discussed later in the chapter, some of these channels are related to the growth-enhancing e?ects of increased ?nancial ?ows. For example, augmentation of domestic savings, reduction in the cost of capital, increase in productiv-ity through transfer of technological know-how, and stimulation of do-mestic ?nancial-sector development could all provide direct growth bene-?ts, which in turn should help reduce poverty.

Second, an increase in macroeconomic volatility tends to reduce the well-being of poor households. Recent empirical research ?nds that vola-tility has a signi?cantly negative and causal impact on poverty (Laur-sen and Mahajan 2005). Why does macroeconomic volatility appear to be especially harmful for the poor? First, the poor have the least access to ?-nancial markets, making it di?cult for them to diversify the risk associated with their income, which is often based on a narrow set of sources, includ-ing mainly labor earnings and government transfers. Second, since the poor rely heavily on various public services, including education and health, they are directly a?ected by changes in government spending. Given that ?scal policy is procyclical in most developing countries, this magni?es the negative impact of volatility on poverty, especially during ?-nancial crises. Moreover, the poor often lack necessary education and skill levels, which limits their ability to move across sectors in order to adjust to changes in economic conditions. As we discuss later in the chapter, in the-ory, increased trade and ?nancial ?ows could help reduce macroeconomic volatility, which also could have bene?cial e?ects for the poor (Aizenman and Pinto 2005).

The principal conclusions that emerge from our analysis of the macro-economic e?ects of ?nancial globalization are sobering but in many ways informative from a policy perspective. It is true that many developing econ-omies with a high degree of ?nancial integration have experienced higher growth rates. It is also true that, in theory, there are many channels by which ?nancial openness could enhance growth. However, a systematic ex-amination of the evidence suggests that it is di?cult to establish a robust causal relationship between the degree of ?nancial integration and output growth performance. Furthermore, from the perspective of macroeco-nomic stability, consumption is regarded as a better measure of well-being than output; ?uctuations in consumption are therefore regarded as having a negative impact on economic welfare. There is little evidence that ?nan-

Financial Globalization, Growth, Volatility in Developing Countries459 cial integration has helped developing countries to better stabilize ?uctua-tions in consumption growth, notwithstanding the theoretically large ben-e?ts that could accrue to developing countries in this respect. In fact, new evidence presented in this paper suggests that low to moderate levels of ?-nancial integration may have made some countries subject to even greater volatility of consumption relative to that of output. Thus, while there is no proof in the data that ?nancial globalization has bene?ted growth, there is evidence that some developing countries may have experienced greater consumption volatility as a result.

One must be careful, however, not to draw the inference from these re-sults that ?nancial globalization is inherently too risky and that developing countries should retreat into stronger forms of capital controls. First, as we discuss in an earlier, extended version of this paper (Prasad et al. 2003), empirical evidence supports the view that countries are considerably more likely to bene?t from ?nancial globalization when they take simultaneous steps—sometimes even modest ones—to improve governance, transpar-ency, and ?nancial-sector regulation. Second, it is almost surely the case that excessive reliance on ?xed exchange rate regimes has been a major contributory factor to ?nancial crises in emerging-market countries over the past ?fteen years. Moving to more ?exible exchange rate regimes is therefore likely to considerably alleviate some of the risks countries must endure as they become more ?nancially globalized (for countries that are not ?nancially globalized, ?xed exchange rate regimes may be a perfectly good choice, as the empirical results in Rogo?et al. 2004 suggest). Third, countries that consistently face problems associated with government debt (referred to as “serial defaulters” by Reinhart and Rogo?2004), are more likely to bene?t from ?nancial globalization if their governments simulta-neously take measures to avoid an excessive buildup of debt.

It is also important to note that much of the analysis in this paper focuses on de facto rather than de jure ?nancial globalization. This makes sense in an empirical paper since capital controls come in so many ?avors, and en-forcement varies so widely across countries, that cross-country empirical comparisons based on measures of de jure capital controls are extremely di?cult to interpret. By contrast, de facto ?nancial integration is not a variable that a country’s government can easily regulate. Although many countries have tight capital controls on paper, their degree of de facto ?-nancial globalization is nevertheless high because these controls can be easily evaded in practice. This problem is almost surely exacerbated by the kind of domestic ?nancial liberalizations that many countries have chosen to undergo over the past two decades in an e?ort to channel savings more e?ciently and thereby spur growth. At the same time, some poor countries have few impediments to capital ?ows, but their level of de facto ?nancial globalization is still very low, even when measured relative to national in-come.

460Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose

As noted earlier, this paper does not look directly at how ?nancial glob-alization a?ects absolute or relative measures of poverty. Based on the re-sults from our analysis, the e?ects could easily go in opposite directions.1 On the one hand, sustained high growth is the most consistently successful policy for alleviating absolute poverty, as China and India have succeeded in doing over the past two decades. On the other hand, periods of high growth are often associated with higher income inequality, and, therefore, relative measures of poverty may easily rise. Increased macroeconomic volatility, however, probably increases both absolute and relative measures of poverty, particularly in the case of ?nancial crises that lead to sharp rises in unemployment. The evidence presented in this paper suggests that a de-tailed study of the link between ?nancial globalization and poverty is likely to yield ambiguous results for emerging-market countries, albeit with the same caveats: countries that work simultaneously to improve institutions, and ones that avoid overly ?xed exchange rate regimes, have a much better chance of seeing ?nancial globalization lead to poverty reduction, at least by absolute measures.

The remainder of this section provides an overview of the structure of the paper. In brief, section 11.2 begins with documentation of some salient features of global ?nancial integration from the perspective of developing countries. Sections 11.3 and 11.4 analyze the evidence on the e?ects of ?-nancial globalization on growth and volatility, respectively, in developing countries. Section 11.5 concludes.

11.1.1De?nitions and Basic Stylized Facts

Financial globalization and ?nancial integration are, in principle, di?er-ent concepts. Financial globalization is an aggregate concept that refers to rising global linkages through cross-border ?nancial ?ows. Financial inte-gration refers to an individual country’s linkages to international capital markets. Clearly, these concepts are closely related. For instance, increas-ing ?nancial globalization is perforce associated with rising ?nancial inte-gration on average. In this paper, the two terms are used interchangeably. Of more relevance for the purposes of this paper is the distinction be-tween de jure ?nancial integration, which is associated with policies on capital account liberalization, and actual capital ?ows. For example, indi-cator measures of the extent of government restrictions on capital ?ows across national borders have been used extensively in the literature. By this 1. Since it is di?cult to measure poverty and to isolate the impact of globalization on poverty from various other factors, recent studies do not reach an unambiguous conclusion on this issue. While Easterly (chap. 3 in this volume) documents that neither ?nancial nor trade ?ows have any signi?cant impact on poverty, Harrison (introduction to this volume) notes that “there is certainly no evidence in the aggregate data that trade reforms are bad for the poor.” Winters, McCulloch, and McKay (2004) also argue that the empirical evidence of-ten suggests that trade liberalization helps reduce poverty in the long run and note that “it lends no support to the position that trade liberalization generally has an adverse impact.”

Financial Globalization, Growth, Volatility in Developing Countries461 measure, many countries in Latin America would be considered closed to ?nancial ?ows. On the other hand, the volume of capital actually crossing the borders of these countries has been large relative to the average volume of ?ows across all developing countries. Therefore, on a de facto basis, these countries are quite open to global ?nancial ?ows. By contrast, some countries in Africa have few formal restrictions on capital account trans-actions but have not experienced signi?cant capital ?ows. The analysis in this paper will focus largely on de facto measures of ?nancial integration, as it is virtually impossible to compare the e?cacy of various complex re-strictions across countries. In the end, what matters most is the actual de-gree of openness. However, the paper will also consider the relationship be-tween de jure and de facto measures.

As will be discussed in section 11.2, a few salient features of global cap-ital ?ows are relevant for the central themes of the paper. First, the volume of cross-border capital ?ows has risen substantially in the last decade. Not only has there been a much greater volume of ?ows among industrial coun-tries, but there has also been a surge in ?ows between industrial and devel-oping countries. Second, this surge in international capital ?ows to devel-oping countries is the outcome of both “pull” and “push” factors. Pull factors arise from changes in policies and other aspects of opening up by developing countries. These include liberalization of capital accounts and domestic stock markets, and large-scale privatization programs. Push fac-tors include business cycle conditions and macroeconomic policy changes in industrial countries. From a longer-term perspective, this latter set of factors includes the rise in the importance of institutional investors in in-dustrial countries and demographic changes (e.g., relative aging of the population in industrial countries). The importance of these factors sug-gests that, notwithstanding temporary interruptions in crisis periods or during global business cycle downturns, the past twenty years have been characterized by secular pressures for rising global capital ?ows to the de-veloping world.

Another important feature of international capital ?ows is that the com-ponents of these ?ows di?er markedly in terms of volatility. In particular, bank borrowing and portfolio ?ows are substantially more volatile than foreign direct investment. In spite of a caveat that accurate classi?cation of capital ?ows is not easy, evidence suggests that the composition of capital ?ows can have a signi?cant in?uence on a country’s vulnerability to ?nan-cial crises.

11.1.2Does Financial Globalization Promote Growth

in Developing Countries?

Section 11.3 will summarize the theoretical bene?ts of ?nancial global-ization for economic growth and then review the empirical evidence. Fi-nancial globalization could, in principle, help to raise the growth rate in de-

462Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose veloping countries through a number of channels. Some of these directly a?ect the determinants of economic growth (augmentation of domestic savings, reduction in the cost of capital, transfer of technology from ad-vanced to developing countries, and development of domestic ?nancial sectors). Indirect channels, which in some cases could be even more im-portant than the direct ones, include increased production specialization due to better risk management, and improvements in both macroeconomic policies and institutions induced by the competitive pressures or the “dis-cipline e?ect” of globalization.

How many of the advertised bene?ts for economic growth have actually materialized in the developing world? As documented in this paper, the av-erage income per capita for the group of more ?nancially open (develop-ing) economies does grow at a more favorable rate than that of the group of less ?nancially open economies. However, whether this actually re?ects a causal relationship and whether this correlation is robust to controlling for other factors remain unresolved questions. The literature on this sub-ject, voluminous as it is, does not present a conclusive picture. A few pa-pers ?nd a positive e?ect of ?nancial integration on growth. However, the majority ?nd no e?ect or at best a mixed e?ect. Thus, an objective reading of the vast research e?ort to date suggests that there is no strong, robust, and uniform support for the theoretical argument that ?nancial globaliza-tion per se delivers a higher rate of economic growth.

Perhaps this is not surprising. As noted by several authors, most of the cross-country di?erences in per capita incomes stem not from di?erences in the capital-labor ratio but from di?erences in total factor productivity, which could be explained by “soft” factors like governance and rule of law. In this case, although embracing ?nancial globalization may result in higher capi-tal in?ows, it is unlikely to cause faster growth by itself. In addition, some of the countries with capital account liberalization have experienced output collapses related to costly banking or currency crises. This is elaborated be-low. An alternative possibility, as noted earlier, is that ?nancial globalization fosters better institutions and domestic policies but that these indirect chan-nels cannot be captured in standard regression frameworks.

In short, while ?nancial globalization can, in theory, help to promote economic growth through various channels, there is as yet no robust em-pirical evidence that this causal relationship is quantitatively very impor-tant. This points to an interesting contrast between ?nancial openness and trade openness, since an overwhelming majority of research papers have found a positive e?ect of the latter on economic growth.

11.1.3What Is the Impact of Financial Globalization

on Macroeconomic Volatility?

In theory, ?nancial globalization can help developing countries to better manage output and consumption volatility. Indeed, a variety of theories

Financial Globalization, Growth, Volatility in Developing Countries463 implies that the volatility of consumption relative to that of output should go down as the degree of ?nancial integration increases; the essence of global ?nancial diversi?cation is that a country is able to o?oad some of its income risk in world markets. Since most developing countries are rather specialized in their output and factor endowment structures, they can, in theory, obtain even bigger gains than developed countries through international consumption risk sharing—that is, by e?ectively selling o?a stake in their domestic output in return for a stake in global output.

How much of the potential bene?t in terms of better management of consumption volatility has actually been realized? This question is partic-ularly relevant in terms of understanding whether, despite the output volatility experienced by developing countries that have undergone ?nan-cial crises, ?nancial integration has protected them from consumption volatility. New research presented in section 11.4 paints a troubling pic-ture. Speci?cally, while the volatility of output growth declined, on aver-age, in the 1990s relative to the three earlier decades, the volatility of con-sumption growth relative to that of income growth increased on average for the emerging-market economies in the 1990s, which was precisely the pe-riod of a rapid increase in ?nancial globalization. In other words, as argued in more detail later in the paper, procyclical access to international capital markets appears to have had a perverse e?ect on the relative volatility of consumption for ?nancially integrated developing economies. Interestingly, a more nuanced look at the data suggests the possible pres-ence of a threshold e?ect. At low levels of ?nancial integration, an incre-ment in ?nancial integration is associated with an increase in the relative volatility of consumption. However, once the level of ?nancial integration crosses a threshold, the association becomes negative. In other words, for countries that are su?ciently open ?nancially, relative consumption vola-tility starts to decline. This ?nding is potentially consistent with the view that international ?nancial integration can help to promote domestic ?nancial-sector development, which in turn can help to moderate domes-tic macroeconomic volatility. However, thus far these bene?ts of ?nancial integration appear to have accrued primarily to industrial countries.

In this vein, the proliferation of ?nancial and currency crises among de-veloping economies is often viewed as a natural consequence of the grow-ing pains associated with ?nancial globalization. These can take various forms. First, international investors have a tendency to engage in momen-tum trading and herding, which can be destabilizing for developing econ-omies. Second, international investors (together with domestic residents) may engage in speculative attacks on developing countries currencies, thereby causing instability that is not warranted based on the economic and policy fundamentals of these countries. Third, the risk of contagion presents a major threat to otherwise healthy countries since international investors could withdraw capital from these countries for reasons unre-

464Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose lated to domestic factors. Fourth, a government, even if democratically elected, may not give su?cient weight to the interests of future generations. This becomes a problem when the interests of future and current genera-tions diverge, causing the government to incur excessive amounts of debt. Financial globalization, by making it easier for governments to incur debt, might aggravate this overborrowing problem. These four hypotheses are not necessarily independent, and can reinforce each other.

There is some empirical support for these hypothesized e?ects. For ex-ample, there is evidence that international investors do engage in herding and momentum trading in emerging markets, more so than in developed countries. Recent research also suggests the presence of contagion in in-ternational ?nancial markets. In addition, some developing countries that open their capital markets do appear to accumulate unsustainably high levels of external debt.

To summarize, one of the theoretical bene?ts of ?nancial globalization, other than to enhance growth, is to allow developing countries to better manage macroeconomic volatility, especially by reducing consumption volatility relative to output volatility. The evidence suggests that, instead, countries that are in the early stages of ?nancial integration have been ex-posed to signi?cant risks in terms of higher volatility of both output and consumption.

11.1.4The Role of Institutions and Governance

in the E?ects of Globalization

While it is di?cult to ?nd a simple relationship between ?nancial glob-alization and growth or consumption volatility, there is some evidence of nonlinearities or threshold e?ects in the relationship. That is, ?nancial globalization, in combination with good macroeconomic policies and good domestic governance, appears to be conducive to growth (see Prasad et al. 2003). For example, countries with good human capital and gover-nance tend to do better at attracting foreign direct investment (FDI), which is especially conducive to growth. More speci?cally, recent research shows that corruption has a strongly negative e?ect on FDI in?ows. Similarly, transparency of government operations, which is another dimension of good governance, has a strong positive e?ect on investment in?ows from international mutual funds.

The vulnerability of a developing country to the risk factors associated with ?nancial globalization is also not independent from the quality of macroeconomic policies and domestic governance. For example, research has demonstrated that an overvalued exchange rate and an overextended domestic lending boom often precede a currency crisis. In addition, lack of transparency has been shown to be associated with more herding behavior by international investors that can destabilize a developing country’s ?-nancial markets. Finally, evidence shows that a high degree of corruption

Financial Globalization, Growth, Volatility in Developing Countries465 may a?ect the composition of a country’s capital in?ows in a manner that makes it more vulnerable to the risks of speculative attacks and contagion e?ects.

Thus, the ability of a developing country to derive bene?ts from ?nan-cial globalization and its relative vulnerability to the volatility of interna-tional capital ?ows can be signi?cantly a?ected by the quality of both its macroeconomic framework and its institutions.

11.1.5Summary

The objective of the paper is not so much to derive new policy proposi-tions as it is to inform the debate on the potential and actual bene?t-risk trade-o?s associated with ?nancial globalization by reviewing the avail-able empirical evidence and country experiences. The main conclusions are that, so far, it has proven di?cult to ?nd robust evidence in support of the proposition that ?nancial integration helps developing countries to im-prove growth and to reduce macroeconomic volatility.

Of course, the absence of robust evidence on these dimensions does not necessarily mean that ?nancial globalization has no bene?ts and carries only great risks. Indeed, most countries that have initiated ?nancial inte-gration have continued along this path, despite temporary setbacks. This observation is consistent with the notion that the indirect bene?ts of ?-nancial integration, which may be di?cult to pick up in regression analysis, could be quite important. Also, the long-run gains, in some cases yet unre-alized, may far o?set the short-term costs. For instance, the European Monetary Union experienced severe and costly crises in the early 1990s as part of the transition to a single currency throughout much of Europe today.

Although it is di?cult to distill new and innovative policy messages from the review of the evidence, there appears to be empirical support for some general propositions. Empirically, good institutions and quality of gover-nance are important not only in their own right but also in helping devel-oping countries derive the bene?ts of globalization. Similarly, macroeco-nomic stability appears to be an important prerequisite for ensuring that ?nancial integration is bene?cial for developing countries. These points may already be generally accepted; the contribution of this paper is to show that there is some systematic empirical evidence to support them. In addition, the analysis suggests that ?nancial globalization should be ap-proached cautiously and with good institutions and macroeconomic frameworks viewed as preconditions.

11.2Basic Stylized Facts

De jure restrictions on capital ?ows and actual capital ?ows across na-tional borders are two ways of measuring the extent of a country’s ?nan-

466Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose cial integration with the global economy. The di?erences between these two measures are important for understanding the e?ects of ?nancial inte-gration. By either measure, developing countries’ ?nancial linkages with the global economy have risen in recent years.2However, a relatively small group of developing countries has garnered the lion’s share of private cap-ital ?ows from industrial to developing countries, which surged in the 1990s. Structural factors, including demographic shifts in industrial coun-tries, are likely to provide an impetus to these North-South ?ows over the medium and long term.

11.2.1Measuring Financial Integration

Capital account liberalization is typically considered an important pre-cursor to ?nancial integration. Most formal empirical work analyzing the e?ects of capital account liberalization has used a measure based on the o?cial restrictions on capital ?ows as reported to the International Mon-etary Fund (IMF) by national authorities. However, this binary indicator directly measures capital controls but does not capture di?erences in the intensity of these controls.3A more direct measure of ?nancial openness is based on the estimated gross stocks of foreign assets and liabilities as a share of gross domestic product (GDP). The stock data constitute a better indication of integration, for our purposes, than the underlying ?ows since they are less volatile from year to year and are less prone to measurement error (assuming that such errors are not correlated over time).4

Although these two measures of ?nancial integration are related, they denote two distinct aspects. The capital account restrictions measure re-?ects the existence of de jure restrictions on capital ?ows, while the ?nan-cial openness measure captures de facto ?nancial integration in terms of realized capital ?ows. This distinction is of considerable importance for the analysis in this paper and implies a 2 ?2 set of combinations of these two aspects of integration. Many industrial countries have attained a high de-gree of ?nancial integration in terms of both measures. Some developing countries with capital account restrictions have found these restrictions in-e?ective in controlling actual capital ?ows. Episodes of capital ?ight from 2. Bordo and Eichengreen (2002), Obstfeld and Taylor (2002), and Mauro, Sussman, and Yafeh (2002) examine historical roots of international ?nancial integration.

3. The restriction measure is available until 1995, when a new and more re?ned measure—not backward compatible—was introduced. The earlier data were extended through 1998 by Mody and Murshid (2002).

4. These stock data were constructed by Lane and Milesi-Ferretti (2001). Operationally, this measure involves calculating the gross levels of FDI and portfolio assets and liabilities via the accumulation of the corresponding in?ows and out?ows, and making relevant valuation adjustments. A similar measure using the same underlying stock data has been considered by Chanda (2006) and O’Donnell (2001). Other measures of capital market integration include saving-investment correlations and various interest parity conditions (Frankel 1992). These measures are di?cult to operationalize for the extended time period and large number of countries in the data sample for this paper.

Financial Globalization, Growth, Volatility in Developing Countries467 some Latin American countries in the 1970s and 1980s are examples of such involuntary de facto ?nancial integration in economies that are de jure closed to ?nancial ?ows (i.e., integration without capital account lib-eralization). On the other hand, some countries in Africa have few capital account restrictions but have experienced only minimal levels of capital ?ows (i.e., liberalization without integration).5And, of course, it is not di?cult to ?nd examples of countries with closed capital accounts that are also e?ectively closed in terms of capital ?ows.

How has ?nancial integration evolved over time for di?erent groups of countries based on alternative measures?6By either measure, the di?erence in ?nancial openness between industrial and developing countries is quite stark. Industrial economies have had an enormous increase in ?nancial openness, particularly in the 1990s. While this measure also increased for developing economies in that decade, the level remains far below that of in-dustrial economies.

For industrial countries, unweighted cross-country averages of the two measures are mirror images and jointly con?rm that these countries have undergone rapid ?nancial integration since the mid-1980s (?g. 11.1).7For developing countries, the average restriction measure indicates that, after a period of liberalization in the 1970s, the trend toward openness reversed in the 1980s. Liberalization resumed in the early 1990s but at a slow pace. On the other hand, the average ?nancial openness measure for these countries, based on actual ?ows, shows a modest increase in the 1980s, followed by a sharp rise in the 1990s. The increase in the ?nancial openness measure for de-veloping economies re?ects a more rapid de facto integration than is cap-tured by the relatively crude measure of capital account restrictions. However, the e?ects of ?nancial integration in terms of increased capi-tal ?ows have been spread very unevenly across developing countries.8To 5. An analogy from the literature on international trade may be relevant here. Some coun-tries, due to their remoteness from major world markets or other unfavorable geographical at-tributes, have low trade ?ows despite having minimal barriers to trade even after controlling for various other factors. Similarly, certain countries, due to their remoteness from major ?-nancial centers in either physical distance or historical relationships, may experience limited capital ?ows despite having relatively open capital accounts (see Loungani, Mody, and Razin 2003).

6. The data set used in this paper consists of seventy-six industrial and developing countries (except where otherwise indicated) and covers the period 1960–99. Given the long sample pe-riod, several countries currently de?ned as industrial (e.g., Korea and Singapore) are included in the developing-country group. The following were excluded from the data set: most of the highly indebted poor countries (which mostly receive o?cial ?ows), the transition economies of Eastern Europe and the former Soviet Union (due to lack of data), very small economies (population less than 1.5 million), and oil-exporting countries in the Middle East. See ap-pendix for a list of countries and further details on the data set.

7. A particularly rapid decline in controls occurred during the 1980s, when the members of the European Community, now the European Union, liberalized capital controls. A surge in cross-border capital ?ows followed.

8. Ishii et al. (2002) examine in detail the experiences of a number of developing countries.

examine the extent of these disparities, it is useful to begin with a very coarse classi?cation of the developing countries in the sample into two groups based on a ranking according to the average of the ?nancial open-ness measure over the last four decades (as well as an assessment of other indicators of ?nancial integration).The ?rst group, which comprises twenty-two countries, is henceforth la-

468

Eswar S. Prasad, Kenneth Rogo ?, Shang-Jin Wei, and M. Ayhan Kose

A Fig. 11.1

Measures of ?nancial integration: A,industrial countries;

B,developing countries

Source:IMF World Economic Outlook;Lane and Milesi-Ferretti (2001)

B

Financial Globalization, Growth, Volatility in Developing Countries469 beled as the set of more ?nancially integrated (MFI) countries, and the sec-ond group, which includes thirty-three countries, as the less ?nancially in-tegrated (LFI) countries.9This distinction must be interpreted with some care at this stage. In particular, it is worth repeating that the criterion is a measure of de facto integration based on actual capital ?ows rather than a measure of the strength of policies designed to promote ?nancial integra-tion. Indeed, a few of the countries in the MFI group do have relatively closed capital accounts in a de jure sense. In general, as argued below, pol-icy choices do determine the degree and nature of ?nancial integration. Nevertheless, for the analysis in this paper, the degree of ?nancial openness based on actual capital ?ows is a more relevant measure.

It should be noted that the main conclusions of this paper are not cru-cially dependent on the particulars of the classi?cation of developing countries into the MFI and LFI groups. This classi?cation is obviously a static one and does not account for di?erences across countries in the tim-ing and degree of ?nancial integration. It is used for some of the descrip-tive analysis presented below, but only in order to illustrate the conclusions from the more detailed econometric studies that are surveyed in the paper. The areas where this classi?cation yields results di?erent from those ob-tained from more formal econometric analysis will be clearly highlighted in the paper. The regression results reported in this paper are based on the gross capital ?ows measure described earlier, which does capture di?er-ences across countries and changes over time in the degree of ?nancial in-tegration.

Figure 11.2shows that the vast majority of international private gross capital ?ows of developing countries, especially in the 1990s, are ac-counted for by the relatively small group of MFI economies.10By contrast, private capital ?ows to and from the LFI economies have remained very small over the last decade and, for certain types of ?ows, have even fallen relative to the late 1970s.

11.2.2North-South Capital Flows

One of the key features of global ?nancial integration over the last decade has been the dramatic increase in net private capital ?ows from in-dustrial countries (the North) to developing countries (the South). Figure 11.3breaks down the levels of these ?ows into the four main constituent categories. The main increase has been in terms of FDI and portfolio ?ows, 9. Not surprisingly, this classi?cation results in a set of MFI economies that roughly corre-sponds to those included in the Morgan Stanley Country Index (MSCI) emerging-markets stock index. The main di?erences are that we drop the transition economies because of lim-ited data availability and add Hong Kong Special Administrative Region (SAR) and Singa-pore.

10. Note that the scale of the graph in panel A is twice as big as that of the graph in panel B.

while the relative importance of bank lending has declined somewhat. In fact, net bank lending turned negative for a few years during the time of the Asian crisis.

The bulk of the surge in net FDI ?ows from the advanced economies has gone to MFI economies, with only a small fraction going to LFI economies (?gure 11.3, panels B and C). Net portfolio ?ows show a similar pattern, al-though both types of ?ows to MFI economies fell sharply following the

A B

Fig. 11.2Gross capital ?ows (percent of GDP): A,MFI economies;

B,LFI economies

Source:IMF World Economic Outlook, International Financial Statistics

Note:The reader should note that the left scales on the two panels are di ?erent.

470

Eswar S. Prasad, Kenneth Rogo ?, Shang-Jin Wei, and M. Ayhan Kose

Fig. 11.3Net private capital ?ows (billions of U.S. dollars): A,all developing economies; B,MFI economies; C,LFI economies

Source:IMF World Economic Outlook

Note:Bank lending to the MFI economies was negative between 1997 and 1999.

Asian crisis and have remained relatively ?at since then. LFI economies have been much more dependent on bank lending (and, although not shown here, on o ?cial ?ows including loans and grants). There were surges in bank lending to this group of countries in the late 1970s and early 1990s.Another important feature of these ?ows is that they di ?er substantially in volatility . Table 11.1shows the volatility of FDI, portfolio ?ows, and bank lending to developing economies. Of the di ?erent categories of

Financial Globalization, Growth, Volatility in Developing Countries

471

A C

B

472Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose

private capital ?ows to developing economies, FDI ?ows are the least volatile, which is not surprising given their long-term and relatively ?xed nature. Portfolio ?ows tend to be far more volatile and prone to abrupt re-versals than FDI. These patterns hold when the MFI and LFI economies are examined separately. Even in the case of LFIs, the volatility of FDI ?ows is much lower than that of other types of ?ows.11This di?erence in the relative volatility of di?erent categories has important implications that will be examined in more detail later.

11.2.3Factors Underlying the Rise in North-South Capital Flows

The surge in net private capital ?ows to MFIs, as well as the shifts in the composition of these ?ows, can be broken down into pull and push factors (Calvo, Leiderman, and Reinhart 1993). These are related to, respectively, (a) policies and other developments in the MFIs and (b) changes in global ?nancial markets. The ?rst category includes factors such as stock market 11. Consistent with these results, Taylor and Sarno (1999) ?nd that FDI ?ows are more per-sistent than other types of ?ows. Hausmann and Fernandez-Arias (2000) ?nd weaker con?r-mation of this result and also note that, although the volatility of FDI ?ows has been rising over time, it remains lower than that of other types of ?ows. In interpreting these results, there is a valid concern about potential misclassi?cation of the di?erent types of capital ?ows. Since most of the studies cited here use similar data sources, this is not a problem that can be easily resolved by examining the conclusions of multiple studies.

Financial Globalization, Growth, Volatility in Developing Countries473 liberalizations and privatization of state-owned companies that have stim-ulated foreign in?ows. The second category includes the growing impor-tance of depositary receipts and cross-listings and the emergence of insti-tutional investors as key players driving international capital ?ows to emerging markets.

The investment opportunities a?orded by stock market liberalizations, which have typically included the provision of access to foreign investors, have enhanced capital ?ows to MFIs. How much have restrictions on for-eign investors’ access to local stock markets in MFIs changed over time? To answer this question, it is useful to examine a new measure of stock mar-ket liberalization that captures restrictions on foreign ownership of do-mestic equities. This measure, constructed by Edison and Warnock (2001), is obviously just one component of capital controls, but it is an appropri-ate one for modeling equity ?ows. Figure 11.4shows that stock market lib-eralizations in MFI economies in di?erent regions have proceeded rapidly, in terms of both intensity and speed.12

Mergers and acquisitions, especially those resulting from the privatiza-tion of state-owned companies, were an important factor underlying the increase in FDI ?ows to MFIs during the 1990s. The easing of restrictions on foreign participation in the ?nancial sector in MFIs has also provided a strong impetus to this factor.13

Institutional investors in the industrial countries—including mutual funds, pension funds, hedge funds, and insurance companies—have as-sumed an important role in channeling capital ?ows from industrial to de-veloping economies. They have helped individual investors overcome the information and transaction cost barriers that previously limited portfolio allocations to emerging markets. Mutual funds, in particular, have served as an important instrument for individuals to diversify their portfolios into 12. The stock market liberalization index is based on two indexes constructed by the Inter-national Finance Corporation (IFC) for each country—the Global Index (IFCG) and the In-vestable Index (IFCI). The IFCG represents the full market, while the IFCI represents the portion of the market available to foreign investors, where availability is determined by the IFC based on legal and liquidity criteria. Edison and Warnock (2001) propose using the ratio of the market capitalization of the IFCG to that of the IFCI as a measure of stock market lib-eralization. This ratio provides a quantitative measure of the degree of access that foreign in-vestors have to a particular country’s equity markets; one minus this ratio can be interpreted as a measure of the intensity of capital controls in this dimension.

13. The World Bank’s (2001) Global Development Finance report notes that FDI in Latin America’s ?nancial sector has come about through the purchases of privately owned domes-tic banks, driving up the share of banking assets under foreign control from 8 percent in 1994 to 25 percent in 1999. In East Asia, foreign investors have purchased local banks in ?nancial distress, leading to an increase in the share of banking assets under foreign control from 2 per-cent in 1994 to 6 percent in 1999.

14. The presence of mutual funds in MFIs grew substantially during the 1990s. For example, dedicated emerging-market equity funds held $21 billion in Latin American stocks by end 1995. By end 1997, their holdings had increased to $40 billion. While mutual funds’ growth in Asia has been less pronounced, the presence of mutual funds is still important in many countries in that region. See Eichengreen, Mathieson, and Chadha (1998) for a detailed study on hedge funds.

474Eswar S. Prasad, Kenneth Rogo?, Shang-Jin Wei, and M. Ayhan Kose

A B

C D

Fig. 11.4Foreign ownership restrictions (MFI developing economies): A,total;

B,Asia; C,Western Hemisphere; D,Africa

Source:Edison and Warnock (2001).

Note:This index measures the intensity of restrictions on the access that foreign investors have to a particular country’s equity markets.

developing-country holdings.14Although international institutional in-vestors devote only a small fraction of their portfolios to holdings in MFIs, they have an important presence in these economies, given the relatively small size of their capital markets. Funds dedicated to emerging markets alone hold on average 5–15 percent of the Asian, Latin American, and transition economies’ market capitalization.

Notwithstanding the moderation of North-South capital ?ows follow-ing recent emerging-market crises, certain structural forces are likely to

Financial Globalization, Growth, Volatility in Developing Countries475 lead to a revival of these ?ows over the medium and long term. Demo-graphic shifts, in particular, constitute an important driving force for these ?ows. Projected increases in old-age dependency ratios re?ect the major changes in demographic pro?les that are underway in industrial countries. This trend is likely to intensify further in the coming decades, fueled by both advances in medical technology that have increased average life spans and the decline in fertility rates. Financing the postretirement consump-tion needs of a rapidly aging population will require increases in current saving rates, both national and private, in these economies. However, if such increases in saving rates do materialize, they are likely to result in a declining rate of return on capital in advanced economies, especially rela-tive to that in the capital-poor countries of the South. This will lead to nat-ural tendencies for capital to ?ow to countries where it has a potentially higher return.

All of these forces imply that, despite the recent sharp reversals in North-South capital ?ows, developing countries will eventually once again face the delicate balance of opportunities and risks a?orded by ?nancial globalization. Are the bene?ts derived from ?nancial integration su?cient to o?set the costs of increased exposure to the vagaries of international capital ?ows? The paper now turns to an examination of the evidence on this question.

11.3Financial Integration and Economic Growth

Theoretical models have identi?ed a number of channels through which international ?nancial integration can help to promote economic growth in the developing world. However, it has proven di?cult to empirically identify a strong and robust causal relationship between ?nancial integra-tion and growth.

11.3.1Potential Bene?ts of Financial Globalization in Theory

In theory, there are a number of direct and indirect channels through which embracing ?nancial globalization can help enhance growth in de-veloping countries. Figure 11.5provides a schematic summary of these possible channels. These channels are interrelated in some ways, but this delineation is useful for reviewing the empirical evidence on the quantita-tive importance of each channel.15

15. Some of these channels also come into play in transmitting the bene?cial e?ects of glob-alization to the poor. For example, augmentation of domestic savings, reduction in the cost of capital, transfer of technological know-how, and stimulation of domestic ?nancial-sector development could all provide direct growth bene?ts, which in turn help reduce poverty. Agénor (2003), Easterly (chap. 3 in this volume), and Goldberg and Pavcnik (2004) discuss various theoretical channels through which globalization a?ects poverty.

Globalization 译文

Globalization 全球化 A fundamental shift is occurring in the world economy. We are moving rapidly away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business systems. And we are moving toward a world in which barriers to cross-border trade and investment are tumbling; perceived distance is shrinking due to advances in transportation and telecommunications technology; material culture is starting to look similar the world over; and national economies are merging into an interdependent global economic system. The process by which this is occurring is commonly referred to as globalization. 世界经济正在发生着根本性的改变。我们正迅速地远离这么一个世界,在这个世界里国家经济实体都曾经是相对自给自足,彼此孤立的,就其原因或是设置跨境贸易和投资的壁垒所致,或是因距离、时差和语言的缘故所致;或是因政府监管、文化和商业体制上的的国家差异所致。与此同时,我们正在走向另外一个世界,在这个世界里,跨境贸易和投资的壁垒正在摇摇欲坠,原来感知到的距离因为交通和电信技术上的进步而正在缩小;物质文化在全世界开始看起来都很相似;各种经济实体正融入一个彼此依赖的全球经济体制中。而正在发生的这一个过程,人们通常把它称为全球化。 Correspondent: Globalization has been one of the most important factors to affect business over the last twenty years. How is it different from what existed before? Companies used to export to other parts of the world from a base in their home country. Many of the connections between exporting and importing countries had a historical basis. Today, to be competitive, companies are looking for bigger markets and want to export to every country. They want to move into the global market. To do this many companies have set up local bases in different countries. Two chief executives will talk about how their companies dealt with going global. Percy Barnevik, one of the world’s most admired business leaders when he was Cha irman of the international engineering group ABB and Dick Brown of telecommunications provider Cable & Wireless. Cable & Wireless already operates in many countries and is well-placed to take advantage of the increasingly global market for telecommunications. For Dick Brown globalization involves the economies of countries being connected to each other and companies doing business in many countries and therefore having multinational accounts. 记者: 过去20多年以来,全球化已经成为影响业务的最重要因素之一。那么,现在的全球化与以前有何不同呢? 过去的公司都是把在本国生产基地的商品出口到世界其他各地。进出口各国之间都有着千丝万缕的联系,其中许多联系都有其历史基础。当今,要想具有竞争力,各个公司都在寻求更大的市场,都想把产品出口到每一个国家,都想迈入全球化市场,为此,许多公司都在不同国家建立了本土化基地。今天我们请来两位总裁,让他们来谈谈他们的公司是如何应对全球化的。一位是珀西·巴恩维克,在担任国际工程集团ABB主席一职时,曾是世界上最令人羡慕的商界领袖之一;另一位是迪克·布朗,来自英国大东电报局(Cable&Wireless)的电信提供商。 大东电报局已经在许多国家营运起来了,而且定位很准,充分利用电信业上的日益增长的全球化市场。对迪克·布朗来说,全球化包括彼此联系的各个国家经济实体和在许多国家做生意的、从而拥有跨国账户的公司。 Dick Brown: The world is globalizing and the telecommunications industry is becoming more and more global, and so we feel we’re well-positioned in that market place. You see currency markets are more global tied, economies are globally connected, more so nowadays with

globalization 的参考译文(.11)复习过程

G l o b a l i z a t i o n的参考译文(2013.11)

Globalization A fundamental shift is occurring in the world economy. We are moving rapidly away from a world in which national economies were relatively self-contained entities, isolated from each other by barriers to cross-border trade and investment; by distance, time zones, and language; and by national differences in government regulation, culture, and business systems. And we are moving toward a world in which barriers to cross-border trade and investment are tumbling; perceived distance is shrinking due to advances in transportation and telecommunications technology; material culture is starting to look similar the world over; and national economies are merging into an interdependent global economic system. The process by which this is occurring is commonly referred to as globalization. Correspondent: Globalization has been one of the most important factors to affect business over the last twenty years. How is it different from what existed before? Companies used to export to other parts of the world from a base in their home country. Many of the connections between exporting and importing countries had a historical basis. Today, to be competitive, companies are looking for bigger markets and want to export to every country. They want to move into the global market. To do this many companies have set up local bases in different countries. Two chief executives will talk about how their companies dealt with going global.Percy Barnevik,one of the world’s most admired business leaders when he was Chairman of the international engineering group ABB and Dick Brown of telecommunications provider Cable & Wireless. Cable & Wireless already operates in many countries and is well-placed to take advantage of the increasingly global market for telecommunications. For Dick Brown globalization involves the economies of countries being connected to each other and companies doing business in many countries and therefore having multinational accounts. Dick Brown: The world is globalizing and the telecommunications industry is becoming more and more global, and so we feel we’re well-positioned in that market place. You see currency markets are more global tied, economies are globally connected, more so nowadays with expanded trade, more and more multinational accounts are doing business in many, many more countries. We’re a company at

全球化的利与弊 Economic globalization(英汉)

全球化的利与弊Economic globalization 全世界都在谈论全球化,有的人认为它是本世纪的发明,有的人看到它的负面影响。 经济上的利与弊: 随着电子货币的到来,投资变得很方便,只要点击一下,大量货币就会从一个国家流通到另一个国家。这就开辟了个人投资的新渠道。 提高了劳工的流动性,因此开辟了前所未有的就业和培训前景。 激烈的竞争促使价格下降和服务的改进,例如送货上门和售后服务。 全球化导致产生统一市场,从而使那些不在这个市场中的国家受到更多的剥削。 仅仅300家公司就占全球产值的三分之一,占国际贸易的一半。而食品生产则由12家公司控制。 贫困的劳工群体越来越被排斥在外。不稳定性在增加,1997年在欧洲抛售黄金储备的传闻就使南非5万矿工失业。这就是多米诺骨牌效应。 All over the world about globalization, some people think that it is the invention, some people see its negative effects. Economic advantages and disadvantages: With the arrival of electronic money, it's very convenient for investment, click, a lot of money from one country to flow into another country. It opened up new avenues of personal investment. To improve the labor mobility, and thus opened an employment and training. Competitive price and service to the improvement, such as door-to-door and after-sales service. Globalization leads to a single market, so that the market in the country is more exploitation. Only 300 companies is one-third of global output, accounting for half of the international trade. While food production is controlled by 12 companies. Poverty and labor group is excluded. Instability in 1997 in Europe, selling gold reserves rumours that South Africa is 5 million miners unemployment. This is the domino effect. 统一供应的危险性在增长,忽视了市场上产品的多样性。 Supply risk in growth, has neglected the diversity of products on the market. 社会上的利与弊: 在政治上,欧盟和联合国等组织的权力在扩大,这可以在全球决策的舞台上抵消多国公司的作用。媒体的跨国力量有助于控制不公正现象,有助于各国的言论自由。 南北差距在扩大。贫困世界在全球收入中只占1·4%,10年前占2·3%。 最严重的社会后果是犯罪全球化,对贫困国家劳动力的剥削有增无减。非法移民在增加。 文化上的利与弊: 文化的传播更快了,政治和知识产权的障碍减少了,谁也不能阻止一种文化产品在其国内的传播。“逆殖民化”在加强:例如美国迈阿密和洛杉矶的拉丁化。 亚洲和非洲繁荣城市人口的增长成为文化传播的新的推动力。 最近一份联合国人文发展报告显示,全球文化只朝着一个方向传播:从富国向穷国,而不是从穷国向富国。 在文化生产上,商业利润至上,质量和多样性被忽视。 Politically, the European Union and the United Nations organization such as power in the world, which can be expanded in the decision on the stage of the multinational corporation offset. Multinational force helps to control the media injustices, helps countries freedom of speech.

Globalization definitions

表1:全球化的定義 項 次 人名或機構定義 1 David Held et al.當代社會生活的所有層面(包括文化、犯罪、金融、宗教精神等),在整個世界的相互聯繫上,已經日益擴張、深入和加速。 2 Ulrich Beck 跨國行動者從權力、取向、認同和網絡等各種面向穿透 和侵蝕主權國家的過程。 3 R. Cohen and P. Kennedy 時空概念的變化、文化互動的增長、世界所有居民都面臨共同問題的增加、相互聯繫和相互依存的增強、跨國行為體的發展和跨國組織網絡的擴展,以及全方位的一體化。 4 A. G. McGrew 組成當代世界體系的國家與社會之間的聯繫和相互溝通 的多樣化,是世界某個部份發生的事情、決定和活動能 夠對全球遙遠地方的個人和團體產生重要影響。 5 Barbara Parker (2005: 49) 對傳統界限,例如國家、時間、空間等等日漸增加的穿透性。 6 喬治?索羅斯 (2002: i) 全球化等於資金的自由流動,而國家也愈來愈受到全球金融市場及跨國企業的主導。 7 Kenich Ohame 國與國間貿易界限或障礙的消弭。 8 Peter Dicken 為傳統國際生產、投資及貿易形式上的轉變。 9 Douglas Kellner (2002) 高度複雜、矛盾和模糊的制度與社會關係,以及牽涉商 品、勞務、想法、科技、文化形式和人的流動。 10 卡爾?海因 茲?巴奎 全球化係以貿易聯繫的密切程度為基準,國際貿易額佔 全球生產的比例越高,世界經濟全球化的程度就越高。 11 Richard C. Longworth 全球化可視為全球經濟體系的形成,使企業家能夠在世 界任何地方籌募資金,藉著這些資金,利用世界任何地 方之科技、通訊、管理和人才,在世界任何地方製造商 品,賣給世界任何地方的顧客。 12 Richard G. Harris (1993) 經濟學者通常將全球化視為生產、分配和商品行銷的國 際化。 13 Christopher Chase-Dunn et al. (2000) 全球化通常意指通訊和運輸科技的改變,資本流動和商 品貿易日增的國際化,以及經濟競爭的主戰場從國內市 場轉移到世界市場。

globalizationinmyeyes我眼中的全球化

Globalization in my eyes Globalization has penetrated into all aspects of our life around the world. We can see it everywhere and anytime. It benefits our life a lot. In view of going out to play, globalization in economy makes it convenient for people to travel all over the world and enjoy wonderful scenes in different places. Besides, globalization in food gives eating lovers chances to taste different foods easily. And globalization in industry creates more wisdom and has deep influence on the development of industry, etc. However, there are also disadvantages during the process of globalization. On the one hand, more and more Chinese people are used to the foreign lifestyle, and they usually celebrate foreign holidays instead of our traditional ones. On the other hand, globalization has a great impact on our national products. There is a sense among people that foreign goods are better than goods made in China. Last but not least, it enlarge the distance between the developing countries and the developed countries, which is bad for the global harmony. In my eyes, globalization is a two-edged sword. If we master it validly, we can create a new world, or what wait us is destroy.

全球化(globalization)

Good morning, everyone! I am deeply honored to give this speech, today, what I want to say is the impact of globalization and the attitude we should hold. 我深感荣幸做这次演讲,今天,我想说是全球化的影响以及我们应该持有的态度。 In most people’s minds, globalization refers to the unimpeded flows of capital, labor and technology across national borders, the world is gradually becoming a whole,connected and indivisible. Globalization is the inevitable trend of the development of human society, and it is changing the world. 在大多数人心目中,全球化是指资本、劳动力和技术不受阻碍的跨国界流动,世界正逐渐成为一个整体,相互连接、不可分割。全球化是人类社会发展的必然趋势,它正改变着世界。 In the era of economic globalization, cross-border transactions are everywhere. Many people engage in abroad business, as a result, some people’s national awareness gradually turns to be very weak. There are even some people saying that national identity makes no difference for them. I don't agree with this idea at all.There is a saying that businessmen feel at home wherever they are.However,as a matter of fact,each businessman has only one home,the place where he was born and grew up.Cite an example,a Chinese who has been working overseas for many years can't lose his sense of national awareness to China because of the long time stay in the overseas.Working abroad gives him the material life he wants,but his roots are still in China,which is his emotional attribution.He is a Chinese wherever he is,this sense of belonging can’t be lost. 在经济全球化的时代,跨境交易无处不在。很多人从事于国外业务,其结果是,一些人的国家意识渐渐变成是非常薄弱。甚至有些人说国家认同对他们来说没有什么影响。我根本不赞同这种观点。有一种说法说:商人四海为家。然而,实际上,每个商人有只有一个家,那个生他养他的地方。举个例子,一个长期在海外工作的中国人不能因为长时间呆在海外而失去了国家意识。在国外的工作给他想要的物质生活,但他的根还在他的情感归属地——中国。无论身在何方,他都是一个中国人,这种归属感不能丢失。 As borders and national identities become less important, some find that threatening and even dangerous.Harvard Professor Samuel Huntington describes Davos Man as an emerging global superspecies and a threat in an essay. He says that these people have little need for national loyalty,view national boundaries as obstacles.As far as I am concerned,endorse a global outlook does not mean erasing national identity.On the surface,they left their country, in fact, they not only drove the development of their own national economy, but also made a huge contribution to the development of the world economy.This has largely reflected their patriotic feelings. 随着国界和对国家的认同变得不那么重要,有些人将此当成威胁,甚至危险。哈佛大学教授塞缪尔·亨廷顿在一篇文章中将达沃斯人描写成新兴的全球超级物种和威胁。他说那些人不需要什么对国家的忠诚,将国界视为障碍。在我看来,对全球观表示赞同并不意味着去除对国家的认同。表面上,他们离开自己的国家,事实上,他们不仅带动本国经济的发展,还对世界经济的发展造成巨大的贡献。这也充分地反映了他们的爱国情怀。 The process of globalization is accompanied by opportunities and challenges .It promotes the development of human society, but also brings some disasters to the world.The terrorist attacks on the United States on September 11,2001 ,which is considered an example of the disaster of globalization,brought huge losses to the United States, and brought a warning to the world. Globalization fatigue is still much in evidence in Europe and America,while in places like China and India,globalization has brought a huge opportunity for their development. 全球化进程被伴随着机遇和挑战。它促进了人类社会的发展,但也给世界带来一些灾难。2001年9月11日

泛读教程四 unit 3 Globalization电子版

Unit 3 Word Pretest: For each italicized word or phrase, choose the best meaning below. 1.The collection is characterized by a mélange of bold graphics, statements and exotic Indian motifs that are both classic and contemporary. A.style B. feature C. mixture D. separation 2.The weather is one variable to be considered. A.something that is subject to change B. something of great importance C. key point D. necessity 3.You'll be biased to put extra weight on the cases that support your theory and diminish the cases that refute it. A.prove B. disapprove C. violate D. maintain https://www.doczj.com/doc/4e9759261.html,st week the government unveiled a media sector review intended to spawn a bit more competition. A. abolish B. destroy C. go beyond D. engender 5.Their latest computer outstrips all its rivals. A.surpasses B. defeats C. follows D. modifies 6.All the children are lumped together in one class, regardless of their ability. A.taken care of B. watched over C. put together D. brought up 7.As a journalist, she refuses to gloss over their faults or silence their critics. A.set up B. take over C. cover up D. get over 8.We can foresee a new paradigm in the global market in the 21st century. A.pattern B. problem C. scenario D. prospect 9.This kind of sedentary lifestyle costs you in more ways than you might think. A.tending to follow fashion B. tending to do much exercise C. tending to sit D. tending to move about https://www.doczj.com/doc/4e9759261.html,ck of time precludes any further discussion. A.speeds up B. slows down C. includes D. excludes Global Mélange Globalization and culture is not an innocent theme. The intervening variable in

雅思范文全球化globalization

Nowadays we can enjoy the same films, fashions, brands, advertisements and TV channels. The evident difference between countries is disappearing. To what extent do you think the disadvantages overweight the advantages of this? Globalization creates conditions for widening international exchanges, strengthening mutual understanding between nations, expanding cultural, educational, and scientific cooperation between nations and countries, enjoying the cultural achievements of people around the world which encourages the process of modernization and the enrichment of national culture. However, these conditions also create the possible danger of diminishing the national culture with a negative impact on the pre123vation of national identity. Through globalization and an open door policy, erroneous concepts and a lowering of ethical standards, a selfish and individualistic lifestyle and harmful cultural products can easily be imported into the country. At present, modern information technology which in the main is controlled by US is hourly and intensively disseminating US ideology, way of life, culture and films across the world. Even US food is promoted so that some people consider globalization as global Americanization. During the process of economic globalization, inequality between developed and developing countries has been increasing and the gap between the rich and the poor has become wider, most of the result of globalization go to assist developed countries. Globalization does not pose equal interests and risks to all nations. With an overwhelming advantage compared to most of the developing countries in terms of finance and the level of science and technology, developed ca123alist countries control the situation of economic globalization. For these reasons, globalization is a fierce and complicated struggle in both cultural and ideological fields. We take the initiative in international economic integration but also have to take the initiative in fighting to keep our distinct culture resisting pro-foreign and cross-bred phenomena, and overcoming the psychology of preferring money over ethical values. 雅思高分倒装句 1. But unpopular as red has been in the past, at the moment it is a favorite hair dye. 结构:全句有2个谓语动词:has been和is.其中,as引导的让步状语从句是一个部分倒装句,按照正常语序应该是Although red has been unpopular in the past.句子可被拆分为, 1). Red has been unpopular in the past. 2). But at the moment it is a favorite hair dye. 翻译:尽管过去红色不怎么流行,现在却是一种备受欢迎的染发颜色。 2. Only when he has lost his way does he realize that he wasn't careful enough to make sure that he really did understand. 结构:全句有4个谓语动词:has,does realize,wasn't和did understand..其中主句的是does realize.本句话是以only开头的强调句,其所强调的是when引导的条件状语从句。第一个that 引导的是realize的宾语从句。第一个that引导的是make sure的宾语从句。

大学英语作文-globalization

大学英语作文 globalization Just as we know, the development of globalization brings tremendous positive effects to the whole world. It gives a chance not only for developed countries but also developing countries. Particularly,it brings the large favor for the world’s poor. To begin with, globalization makes capital and labor mobility greater than before. The poor, who live in the developing countries, can choose to work in some foreign corporations which can pay the higher salaries for them. They will improve the situations of their lives and make their children enjoy better education than ever. As capital and labor become more mobile, international tax competition rises.So many governments have to cut tax rates. As a result, tax systems around the world become more efficient, economic output and incomes will rise.

globalization

First of all, it has been asserted that globalization provides the increasing of productivity and life standard of societies. To begin with productivity is indeed increased as it can be seen that the population of the world is rising rapidly even uncontrollable and more people means that there is a need of more product too. Thus Globalization responds the needs of 7 billion people. Moreover the standards of life is a lot better than 50 years ago as they are more machines and systems invented in developed countries supporting all world. However there is another side of the facts. Globalization causes the poor citizens having more requirements. Secondly cultural intermingling is enlarging with globalization which lets the people from all over the world able to communicate easier. On the other hand sharing traditional behaviors cause them fading as boundaries are disappearing. The most important disadvantage of globalization is the increasing number of the loafer. After the industrial revolution, industry gravitated some particular countries. Because of that, these countries became a power in industry. However production decreased and so unemployment was raised in the other countries. Another reason of the unemployment rise is that the need of less manpower. As stated at Wikipedia, many workers found themselves suddenly unemployed, as could no longer compete with machines which only required relatively limited work to produce more product than a single worker. Another major damage of globalization is that some cultures are getting lost. The cultures of the countries that have more economic power are more dominant than others. Because, wealthy countries produce many things that can affect cultures, for example, clothes, movies and technologic products. According to Ikerd, while the global community is increasing, more and more people have became ignorant about social, ethical and moral values which are various in defining groups. (2002) Therefore, globalization damages small cultures which are in risk of being extinct. Big disadvantages. The final significant effect of globalization is the difficulty of competition. With globalization, trade between the countries has been started to remove limits. This situation of enterprises has prepared the ground to be in constant competition with not only national competitors but also international competitors. Therefore, business requires being in a more rigorous and challenging competitive atmosphere to maintain continuity and development. Rising of monopole companies and trough among production costs are the main effects of this hard competition in business. As pointed in Global Policy Forum, undeveloped countries choose to use foreign capital for their improvement however it disposes the equality and stability instead. In conclusion, unemployment, social degeneration and difficulty of competition are the killer disadvantages on people life that based on globalization. In my opinion, people must be aware of this exploitation. Globalization is a one-way tale. 首先,它一直宣称,全球化提供了增加生产力和社会生活的标准。要开始与生产力的确是,因为它可以看出,世界人口增长迅速,甚至无法控制和更多的人增加,意味着有需要更多的产品。因此,全球化响应7亿人的需要。此外,生活标准是很多比50年前,因为它们是在发达国家支持世界所有发明更多的机器和系统更好。然而,事实的另一面。全球化导致的贫困公民有更多的要求。其次,文化的交织是扩大它可以让

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