Finance

Money is a liquid asset—that is, it is easily exchanged. Today, the mobility of money is increasing as never before. One of the factors in this mobility is what is known as financial integration. This is when financial markets, places where assets such as stocks and bonds, currencies, and derivatives are traded (e.g., the New York Stock Exchange, or NYSE), are linked regionally, nationally, or globally through such activities as information sharing, using new technologies, buying and selling financial products such as insurance policies, investing in international markets, and others. Financial integration is another aspect of economic interdependence. As a phenomenon, financial integration has existed at least since the late 17th century in the Netherlands, where stock and bullion trading and foreign exchange trading took place at the Amsterdam Exchange (Financial, 2013, par. 3).

This kind of financial interdependence can minimize risk by diversifying it, and can provide more and better investment opportunities, with higher rates of return, but it can also harm poorer countries by encouraging capital flight. The integration of finance has resulted in what is known as the borderless economy, where financial institutions and corporate capital have increasing influence over how economic wealth is located and distributed.

New financial linkages can also mean that when the pace of growth is fast in developed countries, it speeds up in developing countries as well. Presently, growth rates are faster in developing countries. "The sharp division between rich and poor countries that characterized the world since the industrial revolution in the early part of the 19th century is now weakening" (Derviş, 2012, para 6). "First, globalization—through strengthened trade links and rising foreign direct investment—facilitates catch-up growth as latecomers import and adapt know-how and technology. It is much easier to adapt technology than to invent it" (Derviş,  para 10). "The rather stark division of the world into ‘advanced' and ‘poor' economies that began with the industrial revolution will end, ceding to a much more differentiated and multipolar world economy" (Derviş, para 17).

Multinational corporations have integrated economies on national and local levels into global and regional networks. "The distinction between domestic economic activity and worldwide economic activity, as the range of products in any superstore will confirm, is becoming increasingly difficult to sustain" (Held and McGrew, n.d., par. 12). These multinational corporations have become the primary conduit for selling goods and services abroad (Held and McGrew, par. 13).

Perhaps the easiest way to think of this aspect of economic interdependence is as a sort of financial openness that encourages buying, investment, and growth.

Click the first link below for a quick look at multinational corporations and the second link for some potential benefits of globalization. The third link lists some potential negatives.

http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev3.shtml

http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev4.shtml

http://www.bbc.co.uk/schools/gcsebitesize/geography/globalisation/globalisation_rev5.shtml