Globalisation After the Financial Crisis: Structural Change and Emerging Market Multinationals

Abstract

During the “Great Moderation” period before the global financial crisis, globalisation was widely regarded in policy and academic circles as an inexorable process and as a broadly benign one. If appropriate policies were pursued, globalisation held out the prospect of higher growth and global convergence. Change within economies could be managed with appropriate supply side policies; resistance to changes from globalisation would only lead to welfare losses. The drivers of globalisation processes were not always clear in these accounts; technological changes enabled greater international flows, but policy changes also underpinned the growth of global markets.

This chapter examines the shifts in the global economy, particularly in relation to emerging economies. It examines the most recent phase of globalisation in context and how it has led to huge shifts in global economic activity with profound effects on the fortunes of different groups, and whether the financial crisis has led to a crisis of globalisation and a reversal of earlier integration. It highlights the role of emerging economy multinationals in the context of the shift of global economic activity and the implications of this for the future prospects for globalisation. These firms have become increasingly important in the growth of emerging economies. Emerging market multinationals have grown to play a key role in the global economy, and pose competitive challenges for established producers. They appear to pose particular challenges for major European firms.