ABSTRACT
This chapter provides the context for the book with an introduction to globalization and how globalization reshaped the structure of the world economy. It proposes a process model of globalization as a simple mechanism: the reduction of existing barriers to the flow of information and physical objects. Globalization is thereby defined as the process of reducing the barriers to exchange information and objects between separated territorialities. Through the reduction of barriers, the ‘distance’ between formerly separated and isolated territorialities is reduced to make their particular set of resources, goods, markets, knowledge, culture, and social activity accessible to one another. Key enablers are political factors, as well as innovations in management techniques and technology advances in transportation and telecommunication. Unshackled by the reduction of barriers, firms internationalized their operations to emerge as large multinational corporations that changed the competitive landscape in the world economy. This process of internationalization effectively merged formerly separated national markets, leading to a shift of production to the emerging markets and global availability of harmonized goods.
