Impact Of Global Capitalism On The World Economy

1251 WordsDec 7, 20156 Pages
Although there is no single theory to explain the spatial organisation of production regions in the world economy, we continue to see core-periphery patterns and concentrations of activities in specific areas despite powerful forces of globalisation expanding markets and integrating economies. This has created a huge globally expansive network of information, capital and technical flows across regions facilitated through market liberalization, border reductions between countries and the erosion of particular places. The presence of economies of scale, scope and agglomeration play significant roles in explaining the concentration and development of economic activity in particular areas. These forces of concentration and dispersal even in the context of the expanding territorial scope of global capitalism, still remain powerful and we continue to observe the importance of place under globalisation (Massey 1984). Although natural environmental conditions are influential in the development of regions, capitalism is the dominant form of contemporary economic organisation due to historical geography. Indeed, the capitalist word economy is structured around the dynamics of specialisation and the division of labour, whereby countries produce and trade goods and services where they obtain comparative, competitive advantage and lowest opportunity cost. In a capitalist economy specialisation (the act of focusing on a specific work task) leads to higher productivity, output and product
Open Document