The Laws of Globalization and Business Applications

By: Pankaj Ghemawat

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Synopsis: The Laws of Globalization and Business Applications employs a variety of empirical methodologies to establish two broad regularities that apply to international activity at the firm, industry, and country levels - the law of semiglobalization and the law of distance - and explores some of their implications for business. Part I presents evidence in support of the law of semiglobalization at the country and the business levels historically and up to the present. Part II performs an analogous function regarding the second law of globalization, showing that the gravity models that international economists have used to analyze merchandise trade between countries also apply to other types of international interactions - and at the industry and firm levels as well. Part III applies these laws to various challenges and opportunities that distance along various dimensions presents to multinational firms. A free online appendix provides additional data, analysis, and documentation to support research applications.