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Some consequences of globalization for developing countries

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  • Gundlach, Erich
  • Nunnenkamp, Peter

Abstract

Globalization improves the prospects for developing countries (DCs) to catch up economically with industrialized countries. Depending on economic policies with respect to openness and factor accumulation, globalization may increase capital and technology flows to DCs, thereby generating a higher rate of income growth than would be possible in a less integrated world economy. Nevertheless, many observers draw an overly pessimistic picture of the perspectives of DCs in the era of globalization, mainly for three reasons. First, DC membership in institutionalized regional integration schemes such as in Europe and North America is sometimes considered to be a necessary precondition for economic success. Second, a low level of interfirm technology cooperation between rich and poor countries is feared to delink DCs from technological progress. Third, a relatively high concentration of foreign direct investment flows on a few advanced DC hosts is said to limit the development prospects for the majority of DCs. The paper shows that such concerns are largely unfounded.

Suggested Citation

  • Gundlach, Erich & Nunnenkamp, Peter, 1996. "Some consequences of globalization for developing countries," Kiel Working Papers 753, Kiel Institute for the World Economy (IfW).
  • Handle: RePEc:zbw:ifwkwp:753
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    References listed on IDEAS

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    1. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    2. Hiemenz, Ulrich (Ed.) & Gundlach, Erich (Ed.), 1994. "Regional integration in Europe and its effects on developing countries," Open Access Publications from Kiel Institute for the World Economy 794, Kiel Institute for the World Economy (IfW).
    3. Robert J. Barro, 1991. "Economic Growth in a Cross Section of Countries," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 407-443.
    4. N. Gregory Mankiw & David Romer & David N. Weil, 1992. "A Contribution to the Empirics of Economic Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 107(2), pages 407-437.
    5. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-698, June.
    6. Gundlach, Erich & Nunnenkamp, Peter, 1996. "Falling behind or catching up? Developing countries in the era of globalization," Kiel Discussion Papers 263, Kiel Institute for the World Economy (IfW).
    7. Nunnenkamp, Peter, 1996. "The changing pattern of foreign direct investment in Latin America," Kiel Working Papers 736, Kiel Institute for the World Economy (IfW).
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    Citations

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    Cited by:

    1. Hector B. Perera & Asheq R. Rahman & Steven F. Cahan, 2003. "Globalisation and the Major Accounting Firms," Australian Accounting Review, CPA Australia, vol. 13(29), pages 27-37, March.
    2. Pacheco, Ricardo & Nunnenkamp, Peter, 1997. "Wirtschaftliche Integration auf Kosten peripherer Regionen? Chancen und Risiken für den brasilianischen Nordosten im Mercosur," Kiel Working Papers 827, Kiel Institute for the World Economy (IfW).
    3. Milanovic, Branko, 2002. "Can we discern the effect of globalization on income distribution? evidence from household budget surveys," Policy Research Working Paper Series 2876, The World Bank.
    4. Branko Milanovic, 2005. "Can We Discern the Effect of Globalization on Income Distribution? Evidence from Household Surveys," World Bank Economic Review, World Bank Group, vol. 19(1), pages 21-44.
    5. Peter Nunnenkamp, 1998. "Dealing with the Asian crisis," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 33(2), pages 64-72, March.
    6. Gundlach, Erich & Nunnenkamp, Peter, 1997. "Labor markets in the global economy: How to prevent rising wage gaps and unemployment," Kiel Discussion Papers 305, Kiel Institute for the World Economy (IfW).

    More about this item

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements

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