ABSTRACT
Introduction Although the term ‘globalization’ has been used in a variety of ways to refer to a variety of different phenomena, underlying most defi nitions is the growing distribution and integration of economic activities across national (and increasingly, fi rm) boundaries which have resulted, at least in part, from reductions in barriers to trade and investment and advances in technology. 1 Figures 20.1 and 20.2 show signifi cant gross trade fl ows between major regions in 1995 and 2005 and illustrate the increasing fragmentation of production and integration of countries brought about through globalization. The size of the arrows in each diagram refl ects the relative size of exports and each is shaded according to their domestic valueadded content. From 1995 to 2005, we see a considerable increase in gross trade fl ows, the most notable being between China and all other major regions, as well as a decline in the domestic content of export fl ows.
