Global Business over Time

This article explores how business enterprises have been powerful actors in the spread of global capitalism between 1840 and the present day. It also shows how global firms, emerging out of industrialized Western economies, created and co-created markets and ecosystems through their ability to transfer a package of financial, organizational, and cultural assets, skills, and ideologies across national borders. It argues such firms have been shapers of, as well as responders to, globalization waves over the last two centuries. Global firms are also shown to be actors in periodic deglobalization waves. This was because their function was to reinforce the gaps in wealth and income rather than disrupt them. Business enterprises proved disappointing institutions for knowledge and technology transfer. During the first global economy, multinational resource and related investments were highly enclavist and embedded in the institutional arrangements of Western imperialism and autocratic dictators. Western firms reinforced rather than disrupted institutional and societal norms, which restricted growth in many countries outside the West. They often functioned, as a result, as part of the problem, rather than part of the solution. In the more recent globalization era, the strategies of Western corporations have moved beyond the practices of the colonial past, but linkages and spillovers to local economies have often been disappointedly low. Their ability, and motivation, to locate value-added activities in the most attractive locations means that they strengthen clustering rather than encourage dispersion of knowledge.