I Theoretical Perspectives of Globalization

Global Business Flows

Mirjana Radovic-Markovic


Globalization is shaping our economic, social and political realities in numerous ways. Above all, it has a major impact on the development of global finance and financial markets, the dissemination of knowledge through improved communication conditions, the expansion of multinational films and the decentralization of economic activities within and between firms, the development of new forms of employment and job opportunities and the reduction of barriers to trade and investment. When organizations integrate with one another, they cross local boundaries and simultaneously contribute to the economies of several countries. Based on the opinion of many scholars, globalization has interrupted previously strong local and regional economic identities of countries (Sanchez, 2010; Radovic-Markovic, 2019; Alishahi, Refiei, and Souchelmaei, 2019). Increased integration has led to an increased need for a new type of social, political and legal regime. With this in mind, it is logical that the process of globalization becomes an inevitable starting point in all economic analyses at the national level, because modem economic development becomes impossible without accepting the trends in the global market. In accordance with these requirements, specific objectives of this part of the study have been formulated, relating to:

  • 1. Detenniuing the degree of integration of Montenegro and other Western Balkan countries into the global business flows and then positioning in the global market.
  • 2. Exploring the impact of globalization on economic development; competitiveness; innovation; entrepreneurship development and new forms of education, work and employment as well as the resilience of states and enterprises to external and internal shocks (contagions, earthquakes, climate changes, etc.).

Basic Concept and Different Dimensions of Globalization

The concept of globalization is widely set and as such encompasses a number of disciplines analyzed from different perspectives.

For the purposes of this study, the focus will be on how globalization reaches every aspect of economic and social life. This cause-and-effect relationship is often articulated without empirical evidence, which leaves a correlation between globalization and its effect without any measure. However, without measuring the effects of globalization, valid conclusions cannot be drawn, but they remain at the level of arbitrariness of interpretation.

The economic aspect of the KOF globalization index measures the flow of goods, capital and sendees over long distances as perceptions that accompany market exchanges. In addition to actual trade flows and foreign investment, it also covers the extent to which a country restricts capital and trade flows. On the other hand, the social dimension of globalization measures the spread of ideas and information.

Given the large number of theories related to the phenomenon of globalization. they need to be systematized into theories that come from the views of classical scholars and those of contemporary thinkers. The difference between the two approaches is that classical scholars have discitssed cultural and sociological views, whereas contemporary scholars have emphasized the economic and political aspects of the phenomenon of globalization (Table 1.1).

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