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2023 | Book

World Economy and International Business

Theories, Trends, and Challenges


About this book

This textbook offers a comprehensive picture of the world economy, the global business environment, and international business. The book is divided into three parts, the first of which introduces readers to the essentials of the world economy, including its typology, key concepts and theories, the dynamics of the world economy, and key actors and institutions. It also addresses macroeconomic and financial indicators for economic growth and forecasting and discusses major modern trends and problems, such as the Fourth Industrial Revolution, patterns of globalization, shifts in global economic power, and developmental, social and environmental challenges. In turn, the second part focuses on the global business environments, presenting country and regional studies. The third part addresses macro and micro aspects of international business, featuring contributions on topics such as global economic governance, global capital flows, multinational corporations, global value chains, international trade and its regulation and practice, international knowledge transfer, international labor migration as well as foreign aid, external debt, and business culture in international business.

Table of Contents


World and Global Economy

World and Global Economy, Global Business Environment, and International Business: Nature, Formation, and Structure

This chapter provides some notions that will be often used in the subsequent chapters, distinguishes major actors of the global economy, analyzes the historical evolution of the global economy and international business, and gives a brief typology of the world economy and international business. In the end, some clues to the statistics of the world economy and global business environment are provided.

Alexander Bulatov
Concepts and Theories of Global Economy

This chapter pays special attention to the concept of international labor division, the concept of international factor movements, national competitive advantage and global competitiveness theories, and economic globalization theories. Last parts of the chapter deal with other concepts and theories of the global economy, including those of political economy.

Alexander Bulatov, Alexey Drynochkin
World Economy: Growth, Proportions, Efficiency, and Forecasting

This chapter firstly describes the factors and main models of economic growth, as well as its dynamics in retrospect. Then, it analyzes the main economic proportions and indicators of macroeconomic efficiency in the world. At the end of the chapter, there is a section on the methodology and practice of macroeconomic forecasting.

Alexander Bulatov
World Economy Major Trends: New Normal, The Fourth Industrial Revolution, Globalization, Sustainable Development

This chapter describes the main trends of economic development that are characteristic of most countries of the world in the first decades of the twenty-first century; the New Normal, the Fourth Industrial Revolution, globalization and the transition to sustainable development. At the same time, special attention is paid to globalization.

Alexander Bulatov, Boris Kheifets
World Economy Major Trends: Evolution of National Economic Systems

This chapter starts with the fundamentals of national economic systems and methodological approaches. Much attention is paid to the impact of national political, social, and cultural systems on a national economic system. The last paragraph of the chapter focuses on a retrospective analysis of national economic systems, and some forecasts are made.

Alexander Bulatov
World Economy Major Trends: International Economic Integration

This chapter deals with theoretical approaches to the international economic integration and its evolution. The course and direction of integration processes in Europe, the Americas, Africa, Southeast Asia, the Near and Middle East and the post-Soviet space are discussed.

Alexey Drynochkin, Andrey Fedorchenko, Andrzej Habarta, Nikolay Kaveshnikov, Elena Komkova, Galina Kostyunina, Evgenia Morozenskaya
Resources of World Economy: Human Capital

Human capital is considered as the main economic resource of the world, global and national economy. Both the number of labour resources and their quality are analysed. At the same time, special attention is paid to the availability of the resources of knowledge and entrepreneurial skills. Considering that human capital develops under the strong influence of the social sphere, the models of the state's social policy are analysed.

Alexander Bulatov, Larissa Kapitsa, Irina Potapova
Resources of World Economy: Real Capital

The chapter contains a thorough and critical analysis of current trends and features of the development of such sectors of the world economy as agrobusiness; fuel and energy; metals, chemicals, and timber; mechanical engineering; light industry; construction; transport, logistics, and communication; science, education, and health; trade and catering; tourism and sports.

Alexander Bulatov, Egor Pak, Marina Petrova, Irina Potapova, Lilia Revenko, Egor Sergeev, Alexey Sidorov
Resources of World Economy: Financial Capital

The chapter starts by exploring the concept of financial capital as well as its composition and distribution in the world. Then the chapter examines the different patterns of national financial systems, and key trends and challenges of the international monetary and financial system.

Vasily Tkachev, Maxim Petrov, Svetlana Pertseva
Resources of World Economy: Natural Resources

The chapter discusses fuel and ore minerals resources. Special attention is paid to the current situation with the deposits and production of oil, natural gas and coal. Uranium, iron, aluminium and other ores are analysed as well. Land, water, forest, agroclimatic and recreational resources are also considered.

Vladimir Gorbanyov, Irina Mitrofanova
Global Challenges: Environment

Presently, environmental problems have become more of a global nature and the associated risks are defined as a major threat to mankind and are already an important factor adding up to global instability. World Community responds to the challenges by altering international, regional, and state policies. A major global economic trend is the shift of the world economy and international business to sustainable development and a green economy path. Business perception of sustainable development has significantly evolved over the recent decades and ESG factors have become indispensable to business strategies.

Natalia Piskulova, Vladimir Gorbanyov
Global Challenges: Backwardness and Modernization

The chapter considers the essence, causes and consequences of economic backwardness. It describes the main models of modernizing the backward economy, as well as the problems of modernization of developed economies.

Alexander Bulatov
Global Challenges: Social Problems

The chapter focuses on such global social problems as mass poverty in less developed economies, social differentiation and demographic problem both in developed and less developed economies, and non-observed economy in both groups of countries.

Larissa Kapitsa, Maria Apanovich

Global Business Environment: Countries and Regions

Developed Economies as a Group

Based on three centres of developed economies—USMCA, EU, and developed Asia—the major trends, problems, and challenges of developed countries are analysed. The chapter also gives an analysis of the real, financial, external, and social sectors of the developed economies as a group.

Alexander Bulatov

This chapter examines the US economic system, the dynamics, proportions, and efficiency of economic development, and the state of business forms, human capital, and the country’s innovation potential. It analyzes the state and structure of the real sector of the economy, the state of the leading branches of the real sector, and the main components of the financial sector. The subject of the analysis is also the state of the country’s foreign economic sector. The US social sector is also considered, including the problem of living standards and income differentiation, the pension system, and the health insurance system.

Victor Supyan
European Union

This chapter deals with a comprehensive analysis of the development of the European Union economy. Both country aspects of economic activity and mechanisms of regulation and coordination of economic policy in the EU at the supranational level are considered.

Andrzej Habarta, Zhanna Komissarova, Elena Maslova, Christina Nadashvili, Boris Zaritskiy, Egor Sergeev, Elena Sidorova, Anna Tsibulina, Alexey Volkov
Developed Economies of Asia

The chapter examines the East Asian economic systems of five advanced Asian economies: Japan, the Republic of Korea, Hong Kong (special administrative region of People’s Republic of China), Singapore, and Taiwan (province of People’s Republic of China). Having formed an alternative to mainstream Western development system, these economies managed to catch up with Western developed economies in a few decades and enter the group of developed post-industrial economies that are at the forefront of the Fourth Industrial Revolution. The chapter examines the main factors contributing to the formation of their economic systems, the structure and dynamics of socio-economic development and the main challenges to sustainable development in the advanced Asian economies.

Sofia Rebrey
Less-Developed Economies as a Group

This chapter gives an overview of less-developed economies as a group beginning with their differentiation, the peculiarities of their development models, while also covering how the Fourth Industrial Revolution, globalisation and regionalisation impact them. Then it characterises their human capital and innovative development, the specifics of the real and financial sectors, external economic relations and social development.

Alexander Bulatov, Denis Elagin

The chapter presents a retrospective, systematic analysis of China’s place and role in the world and global economy. It analyses the evolution of Chinese economic strategy and development model; dynamics, proportions, and efficiency of economic growth; business structure; the role of human capital in innovative development, as well as the real, financial, foreign economic, and social sectors of the economy and society.

Vyacheslav Karlusov, Denis Kalashnikov

The chapter deals with the structure of the Indian economy, its specific features, and its position in the world economy. We also characterize its economic potential. The article discusses the stages of India’s socio-economic development, the main sources of its economic development, and changes in the structure of the country’s economy during its period of independence. We also analyse the general characteristics of agriculture, industry, and services in the country, the structure of its fiscal and monetary spheres, and the issues pertaining to development in the social sphere.

Natalya Galistcheva
Southeast Asia

Achievements and challenges of economic development, as well as patterns of participation in the global economy of ASEAN (Association of Southeast Asian Nations) countries, are analysed. The chapter argues that partial industrialisation, weakness of local innovation systems, excessive dependence on foreign investment and involvement in the global value chains of Asian developed economies prevent ASEAN countries from becoming an independent centres of the world economy.

Denis Kalashnikov
The Near and Middle East

The chapter focuses on the major economies of the region. Experts on Arab, Turkish, Iranian, and Israeli economies analyse the principal aspects of these economies as well as their specifics.

Sergey Jdanov, Andrey Fedorchenko, Nigyar Masumova, Nina Mamedova
Latin America

The chapter gives a retrospective analysis of Latin American economies including the evolution of their economic systems, dynamics and proportions of their development, the business structure of these economies, their human capital and innovation abilities as well as the analysis of real financial, external and social sectors.

Andrzej Habarta
Sub-Saharan Africa

The chapter emphasises that Sub-Saharan Africa's economies continue to develop within the framework of a mixed economy, combining the market sector with semi-natural farms. In conditions of insufficiently developed private national entrepreneurship, foreign capital continues to occupy important positions in the economy. At the same time, the regulatory role of the state in the economic development of the region is increasing. The gap between the countries of the region, especially in industry, infrastructure, and the social sphere, persists and increases in some indicators

Evgenia Morozenskaya
Russia and Other Post-Soviet Economies

The chapter examines the economic systems of large post-Soviet states. In addition to analysing economic dynamics, proportions and business structure, much attention is paid to human capital. The second part of the chapter examines the real, financial, external and social sectors of these economies.

Alexander Bulatov, Yuri Kvashnin, Nina Mamedova, Irina Potapova

International Business: Macro and Micro Aspects

Balance of Payments

The chapter analyses the fundamentals of the balance of payments, its contents and theories, as well as balance of payments management.

Alexander Bulatov
Global Economic Governance and International Economic Organizations

After the analysis of international economic organizations’ role in global economic governance and its concepts and theories, the chapter focuses on modern trends and challenges in a framework of this governance. Particular attention is paid to the challenges faced by global trade, financial, and energy governance, which is followed by a short review of statistics and analytics on international business.

Vladimir Zuev, Elena Ostrovskaya, Marina Simonova
Global Capital Flows

The chapter discusses the basics of intfernational capital movements and their prerequisites, motives, and determinants. A separate paragraph is devoted to the theories of international capital movements. At the end of the chapter, the major indicators of the country's investment climate are analysed.

Alexander Bulatov
Multinational Enterprises

The first part of the chapter analyses the overall picture of MNEs activities in the world. The second part deals with the types of MNEs, their strategy and structure.

Alexey Kuznetsov
Global Value Chains

The global value chains (GVC) are a backbone and extremely important element of the contemporary global economy determining its dynamics to a great extent. GVCs are concentrated in the manufacturing and service sectors. Their operations impact the boundaries and structure of traditional firms and as a result, many multinational enterprises transformed themselves into factoryless firms. From the point of view of management, five GVC governance models can be distinguished. The development of GVCs will be framed by competition, technological revolution, and reshoring.

Natalya Konina
Global Financial Market

Analysing the structure, instruments, and participants in the global financial market, the chapter explores the main aspects of its segments, such as the money and capital markets, stocks, bonds, and derivatives.

Svetlana Pertseva, Galina Panova, Maxim Petrov
International Trade in Goods and Services

The chapter starts with a review of theories of international trade including “new” and “new-new” trade theories. The basic part of the chapter is on trends and challenges in the merchandise and service trade. A special para is devoted to e-commerce.

Tatiana Isachenko, Dmitry Aleshin, Oleg Savelyev, Darya Soldatenko
Multilateral Trading System and Global Trade Regulation

This chapter focuses on the evolution, modern trends, and challenges facing the multilateral trading system. This is a complex set of basic principles of regulation and rules for application on a national and regional scale. The main global platform for negotiations is the WTO, the mechanism, goals, and objectives of which make it possible to organize and control the negotiation process on the global level. Special focus is placed on trade promotion measures as well as sanctions.

Tatiana Isachenko, Ekaterina Arapova
World Markets of Goods and Services

A huge variety of goods and services are involved in world trade. They are distributed in the world commodity markets, which are complex structures that require special approaches to their study. That is why the chapter explores the main elements of the study of commodity markets. Also, it provides the general characteristics of certain types of markets as well as their specifics of pricing.

Lilia Revenko
Marketing in Global Business

This chapter takes a close look at marketing in global business and the authors highlight the benefits, prospects and progressiveness of globalization and digitalization strategies in international marketing, global business and the external market environment. Modern features of the means of communications of global companies and new technologies for the formation of global brands are considered, forms of hybridization of marketing tools are determined, including phygital, omnichannel promotion and contactless sales across new digital frontiers and the implementation of the empirical concept in world trade activities.

Raissa Nozdreva, Natalya Konina, Elena Ponomareva
International Trade Purchase and Sale Transactions

The chapter starts with a paragraph on the legal regulation of international trade transactions. The following paragraphs describe the technique of international trade operations, terms of the contract for the export sale of the goods, and basic terms of delivery.

Olga Degtyareva
International Settlements and Payments, Global Foreign Exchange Market

The chapter considers the basics of international settlements and payments, mainly in foreign trade. It also describes major exchange rate factors and the basics of forecasting the exchange rate. Attention is also paid to exchange rate regimes and currency policy in various groups of countries. The chapter ends with an analysis of the global foreign exchange market.

Irina Platonova
International Knowledge Transfer

This chapter examines the forms and advantages of international technology transfer for developed and developing countries, and the features of modern scientific migration in the context of digital technology development, as well as key aspects of the implementation of educational exchange programmes in different countries of the world.

Petr Kasatkin, Andrey Sumin, Natalya Shelyubskaya
International Labour Migration

The chapter begins with a paragraph on the theoretical foundations of international labour migration. The following paragraphs discuss the global labour market, the consequences of international labour migration and its regulation.

Irina Platonova
Foreign Aid

The chapter analyses the role of foreign aid as an external factor in the economic development of emerging market countries. The theoretical aspects of foreign aid are considered: the forms in which foreign aid is provided, the conditions under which it is provided, and its sources. The main donors and recipients of aid in the world economy are noted. The scale of foreign aid in the world economy from the second half of thetwentieth century to the beginning of the twenty-first century is given.

Natalya Galistcheva
External Debt

The chapter analyses the external debt in the world economy. It focuses on its causes and consequences, as well as the main indicators revealing its scale, both in regions and in the global economy as a whole. The current state of international debts in the world economy in the first two decades of the twenty-first century is analysed.

Natalya Galistcheva
Business Cultures in International Business

It is becoming increasingly important to know the business cultures of different countries. A lot of companies are expanding their activities in international markets. The main factors in the formation and differences of business cultures were religious, historical and linguistic features. The most significant differences in culture-forming values are observed between Western and Eastern business cultures, but a significant difference is also noted within the framework of European culture between the countries of Southern Europe and other countries. In the context of globalisation, there is a certain convergence of values of different countries while maintaining key differences between business cultures.

Natalia Piskulova
World Economy and International Business
Alexander Bulatov
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