The global economy refers to the increasing integration of fragmented national markets for goods and services into a single global market. In such a market, companies may source from one country, conduct research and development (R&D) in another country, take orders in a third country, and sell wherever there exists demand regardless of the customer's nationality. Kenichi Ohmae (1989), a Japanese consultant, calls this the borderless world. While nobody would argue that national borders are completely irrelevant, certain influences have caused the globe to become smaller and smaller. These include technological advances in global communication and transportation, the dilution of culture, a decrease in tariff and nontariff barriers, and a self-feeding change in the degree of global competition.

International Trade

To comprehend the recent increase in global markets, it is important to have some under-standing of the historical development of international trade. While some form of...