In the conditions of contemporary world, the active participation in international division of labor is an essential component of the development process of each country. In this context the foreign trade, as a distinct branch of the national economy is an important factor of economic growth caused by the internationalization of business and determining for the process of globalization. Starting from the belief that international business development tends to become a condition of existence of firms, regardless of size or scope of activity, in this paper I will address the theoretical issues on globalization and internationalization of the economy and business correspondence between the internationalization stages and the forms of international transactions.Economy Globalization, Internationalization Of Business

Paliu-Popa, Lucia

English

Research Papers in Economics

ECONOMY GLOBALIZATION AND INTERNATIONALIZATION OF BUSINESS
Paliu-Popa Lucia, professor university doctor
University „Constantin Brâncuşi” from Târgu Jiu
         Abstract
In the  conditions of contemporary world, the active participation in international division of labor is an 
essential component of the development process of each country.
In this context the  foreign trade, as a distinct branch of the national economy is an important factor of 
economic growth caused by the internationalization of business and determining for the process of globalization.
Starting from the belief that international business development tends to become a condition of existence of 
firms, regardless of size or scope of activity, in this paper I will address the theoretical issues on globalization and 
internationalization of the economy and business correspondence between the internationalization stages and the forms 
of international transactions.
1. Introduction
In the conditions of contemporary world, the active participation in international division of 
labor is an essential component of the development process of each country.
In this context the foreign trade, as a distinct branch of the national economy is an important 
factor of economic growth caused by the internationalization of business and determining for the 
process of globalization.
International business development tends to become a condition of existence of firms, 
regardless of size or scope of activity and the consequence is that the internationalization and 
globalization constitute the fundamental features of the early century and millennium.
The internationalization of business transactions, understood as the pursuit of such activities 
across national borders is not a new phenomenon in the global economy, during the postwar it has 
taken a unprecedented boom under the momentum of several factors, such as:postwar reconstruction 
process, the institutionalization of international economic relations, progressive reduction of barriers 
to   trade  flows   and   international   financial,   cost  of   transport   and   communications,   technical 
arrangements of transport, expanding transnational business.
Regardless of size or scope of the entities in which they operate, business development 
worldwide tends to become a condition of existence for companies and business strategy must 
respond to the demands of globalization.
The evolution of contemporary society, characterized by increased freedom of action, gives 
to entrepreneurs a wide field of functional integration in the foreign trade of the European Union 
and internationally frame.
In the current context of globalization of world economy, functioning and coordinated on 
sustainable development of economic systems involve, necessarily, to obtain the highest results and 
meeting the needs of present without compromising the ability of national economies to meet/satisfy 
their own requirements in the more or less removed future.
Starting from the belief that international business tends to become a condition of existence 
of firms, regardless of size or scope of activity, in this paper I will address the theoretical issues on 
globalization  and  internationalization  of  the  economy   and  business  correspondence  between 
internationalization stages and forms of international transactions.2. Internationalization of business in a globalized world economy
The active participation in international division of labor is an essential component of the 
development process of each country.
Expressing relations which are established between countries in the process of development 
the production and international trade, international division of labor is a global phenomenon, 
operating in a global economy increasingly connected
1.
Economic progress of a country depends, among other things, on the degree of mobilization 
and use intensive of own resources (human, material and financial) and the efforts of each nation 
that can not be isolated from world economic circuit.
Participation in the international division of labor and implicitly to the world economic 
circuit is likely to enhance their efforts of each nation and accelerate economic progress of all states.
As a result, the general economic progress of mankind is the result of economic progress of 
individual countries and the exchange of values between material and spiritually between those
2.
The world economy today is no longer a simple sum of national economies and national 
markets   put   in   contact   but   a   system   global-universal,   unity   through   relationships   between 
subsystems, components, but through it's structure was extremely heterogeneous and contradictory.
The structure of the global economy today is comprised of the following under-systems
3:
¨ the economies and national states; 
¨ the international division of labor; 
¨ the system of international economic relations; 
¨ the world market; 
¨ the economic world circuit, including the mechanisms of development of its flows 
(mechanism of  trade, price, monetary, financial); 
¨ the  institutional system of international economic relations, the economic  organizations 
and international bodies; 
¨ the legal system which includes principles, rules and regulations of economic relations 
between countries.
The level of economic development of various countries, also the degree of diversification 
and specialization of world production, determines the degree of integration of national economies 
into the world economy, which differs substantially by country and groups of countries.
The integration process of economic inter-state relations and ultimately, the globalization, 
involves lifting of restrictions, harmonization of regulations to facilitate trade development, the 
expansion   of   multilateral   cooperation,   technology   transfer,   improving   the   accessibility   of 
international financial exchange-rate.
The globalization of the world economy began in the mid 80's, has acquired new followers in 
the decade of 90 years and now continues to be strongly although it faced regional and national 
concepts.
În the speciality
4  literature, some authors use the term of globalization. Other authors 
consider the relationship terms globalization and worldwide integration as part of the whole, or 
more, globalization is a step in the worldwide process.
P.M. Defarges, in the work/thesis “La mondialisation vers la fin des frontiers”, states that 
French literature promotes the concept of worldwide ((mondialisation) and the Anglo-American
prefer the globalization (globalization) in order to describe and characterize the same phenomenon.
1  Paraschivescu, M.D., Radu, F., Accounting concepts and models in foreign trade activity Tehnopress Publishing 
House, Iasi, 2005, page 11
2  Sută, N., Sută-Selejan, S., History of world commerce and trade policy, All  Publishing House, Bucharest, 1997, page 
111
3  Nechita, V., and others, Political economy, tome. II, Porto-Franco Publishing House, Galati, 1991, page 237 
4 Paraschivescu, M.D., Radu, F., op. cit. page 12 In its vision, the worldwide is characterized by "... the expansion and acceleration of flows: 
goods, services, information, ideas, values ... and frenzy of travel (tourism, temporary or permanent 
emigration)”.
In the French publication "Problèmes Economiques" from April 2002,  globalization  is 
defined as a process that involves three steps: the internationalization, transnationalization and 
globalization. On the other hand strictly referring to globalization, the same publication points out 
that this term is a neologism of Anglo-American origin used to explain globalization. (Hristea AM, 
PhD Thesis "regional groupings in the evolution of the contemporary world", ASE Bucharest, 2004, 
page 16).
Globalization of world economy can be defined, broadly, as the very dynamic process of 
growth of the national linkages, as a result of enlargement and deepening of transnational linkages 
increasingly broad into diverse life spheres of economic, political, social and cultural rights, and 
having the implication the fact that problems become global rather than national, and their solving 
must be appropriate
Addressed from economic and financial point of view, the globalization can be defined as 
the widening and strengthening of links between national economies on the global market of goods, 
services and especially capitals.
A similar definition is presented in a report in 1997 of the International Monetary Fund, that: 
"the phenomenon of globalization is the integration of world economy in strong growth both with 
the markets for goods and services and the capital”.
A   number  of   aspects   of   social   and   economic   life  today   illustrate   the   process   of 
globalization
5:
 the global nature of science and technology: even if the major sources of technical 
progress is concentrated in the developed world, the scientific research is based on global resources, 
and implementation of technology is focusing on global concerns; 
 the global marketing: marketing strategy of companies meet the requirements of 
globalization and promote this process ( universal brands of consumption such as "coca", culture of 
advertising etc.). 
   the global financial system: the world economy"symbolic" is based on a network 
involving, on a global scale, the banking institutions and capital market, national regulatory bodies, 
international financial bodies etc..; 
  the communications infrastructure: technical progress has allowed the improvement of 
communications materials (transport), the coverage of the media world (eg CNN) and, especially, 
the establishment of a global network of transmission / reception of information (eg Internet ); 
   The worldwide institutional frame: some kind of governmental organizations (UN 
system)  or nongovernmental (NGO) promoting debates and actions regarding global issues: 
pollution, crime, under-development etc.
The world states participation in the economic world system is the inside condition of 
development and progress of civilization of the XXI century, it became so, integral part to a global 
economy increasingly uniform.
Economic globalization is a gradual integration of national economies in a process that 
continues to diminish the importance of boundaries for the development of economic activities.
Expanding to world level of economic relations and creating an international business 
environment stimulate the global process and the globalization process also.
The  internationalization  of world economy, understood as the ongoing activities across 
national borders, is not a new phenomenon.
5 Popa, I., Foreign trade transactions, Economic Publishing House, Bucureşti, 2002, page 18In the postwar period, it becomes an unprecedented impetus, under the impulse of many 
factors, including: the process of postwar reconstruction, the institutionalization of international 
economic relations, a progressive reduction of barriers to trade flows and international financial, 
cost of transport and communications, development technical of modes of transport, expanding 
business of transnational societies etc.
The process of globalization and of worldwide action is stimulated by the expansion of 
economic relations and creating an international business environment.
International affairs, seen as all activities outside the national borders, are including 
international trade, foreign production, industrial services in transport, tourism, banking and 
financial, advertising and communications, construction, retail sales and big
6 parties sales.
By overcoming the local, national and regional limits as well as addressing the environment 
in global manner, the enterprise is integrated in the general trend of internationalization with not 
lack of it from this mechanism. 
From this point of view, the internationalization is the body of methods, techniques and 
tools put at the service's strategic approach of the enterprise to work abroad
7.
3. Internationalization stages of business and forms of international transactions
The process of internationalization of business is done in several stages, each stage's being 
related to forms of transactions and specific concepts:
 a  first stage of international business development is the internationalization process of 
trading goods.  To this stage it corresponds, in the forms of international transactions, the 
business/commercial operations. It is, first, the export of goods, supplies and services, and combined 
operations (the counterparty, reexport) or some type of commercial implant in foreign trade 
(creation of trade offices); 
  a second stage of international development is the internationalization of production. 
This can be done through various forms of alliances and international cooperation aimed at:
            -  the technology transfer for the multiplication of goods abroad (licensing, 
francising, selling know-how etc.). 
                       - the partial or total relocation of production capacity and integrating goods in 
distribution system for domestic and international (lohn production, subproduction etc.).
           - creation of overseas units of production and marketing system in joint ventures
 a   third   stage   of   the   internationalization   of   the   business   world   is   the 
internationalization of the firm. In this case, the main way of achieving internationalization is direct 
investment, and which form it takes is the implantation abroad. Implantation process, are usually a 
stage character, ranging from the establishment of abroad branches and processing until assembly to 
complete the industrial and commercial implementation.
The   correspondence   between   internationalization   stages   and   forms   of   international 
transactions is illustrated in Tabel no1
8: 
Tabel 1
Internationalization stages and forms of international transactions
6  Dumitru, I., PhD, Marketing strategies of penetration the foreign market SE Bucharest 2003, page 57, adapted after 
Ball, D.A., McCulloch Jr., W.H., “International business – The challenge of global competition” sixth edition, Irwin 
McGraw - Hill, 1996, page 7
7  Pop, N.Al., Dumitru, I., International marketing,  Uranus Publishing House, Bucharest, 2001, page 15
8 Popa, I., op.cit page 12Internaţionalization
of marketing
International commercial operations                                  
        - export/import of goods
Internaţionalization   of 
production
Alliances and international cooperations                                  
        - licensing, under production, joint societies 
Internaţionalization of 
enterprise
 Implement abroads                                       
        - direct investments in production and marketing 
More and more companies adopt at present business strategies directly aimed at the world 
market as a whole, business development worldwide becoming an imperative of progress and 
evolution of the economic environment.
However we can say that the internationalization of business and globalization of the 
economy affect the expansion of entities in double purpose, namely:
 first, for performance firms, the phenomenom opens the challenge to approach the 
external market through capitalization of the comparative advantages; 
  on the other hand, by competition achieved through imports or implantation performed 
locally by transnational companies, the phenomenom can be for many enterprises a threat.
              
            4. Conclusions
            The development of international business tends to become a condition of existence of firms 
regardless of size or scope of activity, also the consequence of this is that internationalization and 
globalization, the higher rank internationalization, shall constitute in fundamental features of the 
early century and millennium.
Currently, in the line of analysts in the contemporary international economic life has outlined 
a broad convergence of views in the assessment that the world has changed profoundly, they are in a 
transitional political and economic major and early `90 decade was one, as many aspects, quite 
different from the previous one and very difficult on administration or management of many 
complex problems arising from international economic scene.
The process of globalization of world economy, started in the mid `80, got a new decade and 
followers in` 90 and continues today to be present with power, although it faced nationalistic and 
regional concepts.
Aproached from economic and financial point of view, the globalization can be defined as 
the strengthening and deepening the links between national economies on the global market of 
goods, services and especially capital.
It can be summarized that, strictly from an economic point og view, the efficiency of 
resource allocation and use, the economic globalization appears as a rational phenomenon, likely to 
provide a higher volume of goods and services with fewer resources still. 
It follows that economic globalization entails, in essence, the globalization of creation 
process of gross domestic production from world states.
References
· Cerchez, O.,   - Economic efficiency of external  trade, Logos Publishing House, Bucharest, 
2007
· Dumitru, I.             - PhD thesis  „ Marketing strategies of penetration the foreign market”, ASE 
Publishing House Bucharest, 2003
· Nechita, V., 
       others
  - Political economy, Tome. II, Porto-Franco Publishing House, Galaţi, 1991· Paraschivescu, 
M.D., Radu, F.
   -  Accounting concepts and models in foreign trade  activity , Tehnopress 
Publishing House, Iasi, 2005
· Pop, N. Al.,
       Dumitru, I.
  - International marketing,  Uranus Publishing House, Bucharest, 2001
· Popa, I.   - External trade techniques, Economic Publishing House, Bucharest, 2008
· Popa, I.   - International comercial negotiation, Economic Publishing House, Bucharest, 
2008
· Popa, I.   Foreign trade transactions, Economic Publishing House, Bucureşti, 2002
· Sută, N., 
       Sută-Selejan, S.
  -  History of world commerce and trade policy, All   Publishing House, 
Bucharest, 1997, 1997

Accounting concepts and models in foreign trade activity , Tehnopress Publishing House, Iasi,

Economic efficiency of external trade, Logos Publishing House, Bucharest, · Dumitru, I. - PhD thesis „ Marketing strategies of penetration the foreign market”,

Economy Globalization and Internationalization of Business

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