HISTORY OF

GLOBAL MARKET
INTEGRATION
 Roman Period and Early
Voyages
The history of economic globalization can be traced back to
the early years of the Roman Empire, as evidenced by their
extensive transportation network and the existence of
everyday language, the legal system, and currency.
Years went by, and during
the early 15th century, the
different voyages of Vasco
Da Gama, Columbus,
Magellan, and others have
proved that technological
advances have made it
possible to sail over the other
continents and to facilitate
intercontinental trade.
Different global powers that
exist during those times,
such as Spain, Portugal,
Britain, and Italy, have
controlled international
Napoleonic Wars in 1815
and the Beginning of
World War 1

During this time, the international trade expanded

significantly as did cross-border flows of financial
capital and labor.

Technological advancement in this year can be

seen from the replacement of the sail and railroads
by the steam power. The opening of the Suez Canal
has helped to reduce travel times between Europe
and Asia.
The Napoleonic Wars
raged across the world for
over twenty years. France,
led by the Emperor
Napoleon Bonaparte,
struggled for domination
against an alliance of its
many enemies, from
Britain to Russia. Fighting
occurred all over Europe,
and in India, North and
South America, Egypt,
even South Africa. It was
truly the first global war.
Napoleon's impact on globalization was significant. His introduction of the
Continental Blockade in 1806 aimed to defeat Great Britain, but
ultimately failed to achieve its objectives

[1]. The British Navy's ability to keep the Atlantic sea corridor open
allowed for a continuous flow of raw materials and manufactured
products onto international markets, undermining Napoleon's blockade

[2]. Additionally, Britain's strategic alliance with Portugal provided access

to the port of Lisbon and the vast territories of the Portuguese overseas
empire, particularly Brazil

[3]. These factors contributed to the preservation of Britain's global trade

network and hindered Napoleon's efforts to control international markets.
Overall, Napoleon's actions during this time had implications for global
On 21 November,
1806, Napoleon
decreed, from his
Palace in Berlin, a
blockade of the British
Isles and forbade all
British goods and
commerce entering the
continent. This came to
be known as the
'continental' blockade
since de facto most of
the European continent
was under French
influence.
Napoleonic Wars in 1815
and the Beginning of
World War 1

Trade expanded the variety of available goods,

both in Europe and elsewhere. As the trade
monopolies of earlier times were replaced by
intense competition, prices converged globally for
a wide range of commodities, including spices,
wheat, cotton, pig iron, and jute (Findlay and
O'Rourke, 2002). In general, the Government's
policies were favorable to the openness of trade,
capital mobility, and migration.
Napoleonic Wars in 1815
and the Beginning of
World War 1

During this time, Economic structure followed the

core-periphery pattern by which the core countries
were the center of trading, while periphery
countries with abundant
natural resources provide the raw materials and
labor for the core countries.
Two world wars (I & II) and the
Great Depression; Post World
Wars and Post Great
depression

The heightened economic integration achieved

during the early 19th century was ruined by the
two world wars and the great depression.

The major powers of those times, the United

States, Western Europe, and Japan, have
undertaken the task of rebuilding the economic
system, including Infrastructure,
International Trade, and Monetary policies.
World War I, also known as the Great War, started in
1914 after the assassination of Archduke Franz Ferdinand
of Austria. His murder catapulted into a war across Europe
that lasted until 1918. During the four-year conflict,
Germany, Austria-Hungary, Bulgaria and the Ottoman
Empire (the Central Powers) fought against Great Britain,
France, Russia, Italy, Romania, Canada, Japan and the
United States (the Allied Powers). Thanks to new military
technologies and the horrors of trench warfare, World War
I saw unprecedented levels of carnage and destruction. By
the time the war was over and the Allied Powers had won,
more than 16 million people soldiers and civilians alike—
World War II
World War II, the largest and deadliest conflict in
human history, involved more than 50 nations
and was fought on land, sea and air in nearly
every part of the world. Also known as the
Second World War, it was caused in part by the
economic crisis of the Great Depression and by
political tensions left unresolved following the
end of World War I.
The war began when Nazi Germany invaded
Poland in 1939 and raged across the globe until
1945, when Japan surrendered to the United
States after atomic bombs were dropped on
Hiroshima and Nagasaki. By the end of World
War II, an estimated 60 to 80 million people had
died, including up to 55 million civilians, and
numerous cities in Europe and Asia were
reduced to rubble.
The widespread prosperity of the 1920s ended
abruptly with the stock market crash in October
1929 and the great economic depression that
followed. The depression threatened people's
jobs, savings, and even their homes and farms. At
the depths of the depression, over one-quarter of
the American workforce was out of work. For
many Americans, these were hard times.
The Bretton Wood System
This agreement was enacted during the post-world wars. It
is the United States of America who was at that time owned
the two-third of world’s Gold had led this conference in July
1944 with delegates from 44 countries at Bretton Woods,
New Hampshire. Hence, the name Bretton Woods
Agreement.
The goal of this agreement was to create an efficient
foreign exchange system, prevent competitive devaluations
of currencies, and promote international economic growth.
The International Monetary Fund
(IMF) and the World Bank
These two institutions were established as part of the
Bretton woods agreement in 1945. Both of these two
institutions were created to address specific concerns in
regard to the economic crisis that the world has
experienced
International Monetary Fund
(IMF):
This Institution was created to oversee the world’s monetary
system’s stability. The IMF was compromised of 189 member
countries that cooperate and collaborate towards the goal of
fostering global monetary cooperation, establishing financial
stability, maintaining international trade, and promoting growth in
the economy
World Bank

This Institution was established to provide financial assistance and

strategic advice to nations profoundly affected by the previous
world wars. The two main goals of the world bank are to end
extreme poverty and increase overall prosperity.
The General Agreement on Tariffs
and Trade (GATT)
The agreement was signed into law on January 1, 1948
with 23 countries after the world war to monitor world
trade that may lead to economic recovery. Its main
objective was to eliminate barriers in international trade
by either reducing or removing tariffs and quotas.

As time passed by, the agreement was replaced by the

world trade organization in 1995
World Bank
The World Bank has four other branches/organizations that
have specific goals to which realization of that particular Goal
may help the world bank attain its main goal.

a. International Bank for reconstruction and development that

provides debt financing to government that is considered middle
income.

b. Multilateral Investment Guarantee Agency that promotes

investment in
developing countries
World Trade
Organization
The World Trade Organization is a global
organization made up of 164 member countries that
deals with the rules of trade between nations. It
was born out of the General Agreement on Tariffs
and Trade (GATT), which was established in 1947.
Most of the time, the WTO resolve trade disputes
between and among its member countries. Its goal
is to ensure that trade flows as smoothly and
predictably as possible
The World Trade Organization (WTO) is the only
global international organization dealing with the
rules of trade between nations. At its heart are
the WTO agreements, negotiated and signed by
the bulk of the world’s trading nations and
ratified in their parliaments. The goal is to help
producers of goods and services, exporters, and
importers conduct their business.
MARKET
INTEGRATION
MARKET INTEGRATION
Market integration is a term used to identify a phenomenon in
which markets of goods and services that are related to one
another is experiencing similar patterns of increase or decrease in
terms of the prices of those products. The term can also refer to
circumstances in which the prices of related goods and services
sold in a defined geographical location also begin to move in
some sort of similar pattern to one another.
Types of Market Integration

High integration Low Integration

This implies eliminating barriers that The Government may adjust domestic
restrict the movement of goods, policies and institutions through the
services, and factors of production. Also, creation of supranational arrangements.
the Government plays a minor role in Likewise, It is often identified with
policymaking regarding manufacturing, positive values like social protection and
distribution, and flow of goods. the correction of market failures.
Types of Market
Integration
A. Horizontal integration
● A business strategy where one company
takes over another that operates at the same
level in an industry.

● Horizontal integrations help companies

expand in size, diversify their product
offerings, reduce competition, and expand
into new markets.
Types of Market
Integration
B. Vertical Integration
● Vertical integration involves the acquisition
of business operations within the same
production vertical.

● Vertical integrations can help boost profits

and make companies less dependent on their
suppliers or distributors.
Types of Market
Integration
A. CONGLOMERATE

Conglomerate integration refers to the process

by which a company expands its operations into
unrelated business areas or industries.
Association of South East
Nations (ASEAN)
The Association of Southeast Asian Nations
(ASEAN) was formed in 1967 by Indonesia,
Malaysia, the Philippines, Singapore, and
Thailand to promote political and economic
cooperation and regional stability. The
Economic, Political-Security, and Socio-
Cultural Community are the three pillars of
ASEAN Community. The annual meeting is usually
held to promote the economic, social and cultural
development of the region to protect the stability of
its politics and economy against rivalry with
The ASEAN Economic Community
envisions ASEAN as a single market
and production base. Free flow of
goods, services, investments, capital,
and labor will allow the development
of production networks in the region
and enhance ASEAN’s capacity as the
global supply chain.
The goal of ASEAN economic integration is to create a stable, prosperous, and
highly competitive economic region. Three core elements under the
competitive region are:

● Competition policy
● Consumer Protection
● Intellectual Property Rights (IPR)

ASEAN Member States are committed to introduce nationwide competition

policies and laws (CPL) to ensure a level playing field and incubate a culture of
fair business competition to enhance regional economic performance.
Asia Pacific Economic
Cooperation (APEC)
Was established in 1989. Currently, the APEC has a
twenty-one member over the four continents. APEC
Member Economies works together to sustain
economic growth through a commitment to open
trade, investment and economic reform. The
economic growth is usually accomplished through the
reduction of barriers such as tariffs and import quotas.
Its Goal is to ensure the sustainability of growth and
development of the region for the good of its people.
Likewise, the reduction of barriers among member
economies is in consistent with the principles of
The Asia-Pacific Economic Cooperation
(APEC) forum, established in 1989, has
become the pre-eminent economic forum in
the Asia-Pacific region. Its primary purpose is
to promote sustainable economic growth,
trade and investment, and prosperity in the
Asia-Pacific region.
APEC's 21 member economies
are:
 People's Republic of China
 Australia  Peru
 Brunei Darussalam  Republic of Korea
 Canada  The Republic of the
 Chile
Philippines
 Chinese Taipei  The Russian Federation
 Hong Kong, China  Singapore
 Indonesia  Thailand
 Japan  United States of America
 Malaysia  Vietnam
 Mexico
 New Zealand
European Union
Adheres to the economic and political union where its member
countries have a single currency, Euro. Through its
harmonization of its political and economic policy, the European
Union was able to deliver peace, prosperity, and stability for more
than fifty years by which it increases the standards of living of its
people.

The EU remains focused on making its governing institutions more

transparent and democratic. Decisions are taken as openly as
possible and as close as possible to the citizen.

The European Union is the largest trade block in the world. The
European Union is one of the largest exporters of goods and services
North American Free Trade Agreement
(NAFTA)
Was formed in 1994 by the Canada, Mexico and America
for the reason of elimination of barriers when it comes
to trade and investment.

The agricultural sector, production and manufacturing sector,

investment, and other services are some of the economic
sectors wherein tariffs are eliminated.

This organization has also given importance to the protection

of intellectual property rights, environments, and rights of
workers or laborers. Small businesses were among those that
were expected to benefit the most from the lowering of trade
barriers since it would make doing business in Mexico and
North American Free Trade Agreement
(NAFTA)
This organization has also given importance to the
protection of intellectual property rights, environments,
and rights of workers or laborers.

Small businesses were among those that were

expected to benefit the most from the lowering of trade
barriers since it would make doing business in Mexico
and Canada less expensive and would reduce the red
tape needed to import or export goods.
GLOBAL CORPORATIONS
A global corporation, also known as a global company, is
coined from the base term ‘global’, which means all around
the world.

It is a company that operates beyond its local boundary.

Thus, most of the global companies works in more than one
country and has some foreign investment.

Global corporations are deemed to be one of the major

players in economic integration as their goods and
commodities allow other countries to engage in foreign
trading and exchange. Their existence has significant
influenced to the consumer behavior such as changes of
GLOBAL CORPORATIONS

Global corporations are deemed to be one of the major

players in economic integration as their goods and
commodities allow other countries to engage in foreign
trading and exchange. Their existence has significant
influenced to the consumer behavior such as changes
of lifestyles, spending pattern, practices and traditions.
GLOBAL CORPORATIONS

The nature of Global Corporations usually varies

depending on the classification to where it can be
categorized. However, most of the global corporations
as stated above has foreign investment and operating
beyond the borders.
They conduct activities outside their origin
countries such as manufacturing, distribution,
research and development, marketing, and selling
of products. In some ways, the Global Corporation
can influence local and global laws in regard with
trade and exchange. Lastly, most well-known
global corporations have strong brand recognition.
Types of Global Corporations
1. International Companies:

this company operates primarily in a single country but

has some exposure to foreign markets. These are
basically importers and exporters. The most common
type of American international business is one that
purchases products or raw materials from international
markets. Best Buy is an example of this type of
business. The company operates in the United States
and employs mostly American citizens, but it sells a
large amount of imported goods yet they don’t have
Types of Global Corporations

2. Multinational Companies:
this Company operates in more than one country and
receive substantial income from these foreign
operations qualify as multinational in nature.
Multinational companies, while usually controlled by
management based in a single country, cater to
markets in individual countries. It invests directly in
foreign nations, but this is usually limited to a few
areas. Products are customized to local preferences,
rather than homogenized, limiting the ability to create
economies of scale.
Types of Global Corporations

3. Transnational Companies:
transnational companies are the very largest
multinational businesses with separate divisions that
operate with a significant independence in their
assigned markets. A transnational company invests
directly in dozens of countries and has a global
headquarters that distributes decision-making
capabilities to its various local operations.
Types of Global Corporations

4. Global Companies:
This kind of company would usually operate on a
worldwide scale, but it would not be tied legally to any
nation. They have an investment in many countries but
maintain a strong headquarters in one country. They
typically market their products and services to each
individual global market.
A picture is worth
a thousand words