BASES OF WORLD COMMERCE
Geography 333 Instructor: James E. McConnell
Summer, 2006 Office Hours: Monday, 10:45a.m.-12:45 p.m.
SIM/UB Undergraduate Program and by appointment
Tues. and Thurs. 9:00 a.m.-12:45 p.m. Office location:
Classroom #: Phone:
e-mail address: firstname.lastname@example.org
Web page: http://www.buffalo.edu/~geojem/
Course Description and Objectives
In this course, we will examine a variety of global issues and the geographical (i.e., spatial) patterns and processes associated with the newly emerging global economy. Of primary concern are the nature of, and both the theoretical and practical bases for, the shifts that are taking place in the patterns and processes of world commerce. Particular emphasis is given to the importance of place (i.e., location) and the embeddedness of firms and industry sectors within specific social, cultural, political, institutional, and geographical contexts that help to influence the ways in which they develop over time.
The following key questions are posed at the outset to help guide classroom discussions:
· What are the characteristics of the new global economy? How does the global economic-spatial system operate? What are the “bases” of world commerce? Specifically, what are the forces and institutions that are re-shaping the global “map”? What shifts are taking place across the global frontier? Are these processes, forces, and shifts really global in nature? What are the theoretical underpinnings of these shifts, and what are the consequences of these changes for corporations, nation-states, and sub-national regions?
· To what extent and in what manner are technology (i.e., the “great growling engine of change”), industrial districts, and innovative networks impacting the competitive advantages of corporations, nation-states, regions, communities, and individual groups of workers within the global economy? What does “being competitive” mean in today’s changing international environment for each of the above-mentioned entities?
· What is the role and significance of the state (i.e., governments and nation-states) and the “local” (i.e., sub-national regions and communities) within the global space economy? Is the nation-state dead? Is geography dead? Who/Where are the winners and losers in the emerging global economy? Is the local reasserting its power over the global? What power does the local have? What is the relative importance of the concept of “regional creative destruction,” and are spatial industrial systems really being transformed?
· How are national and international trade policy regimes changing the bases of world commerce? What are the bases for the U.S.-Singapore FTA, and what are the likely impacts of this international agreement on both partners and upon the ASEAN community of nations? In particular, what impacts will the agreement have upon economic growth and development, industry-level competitiveness, and corporate decision-making in Singapore, the United States, and the other ASEAN nations?
· What is the role and significance of the individual firm and specific industry sectors within the international space-economy? How do firms and territories interact? What changes are taking place in the international movement of capital, the international location of manufacturing production (e.g., textiles and garments, automobiles, and semiconductors), and the structure and distribution of services (e.g., financial services and distribution industries)? In what specific ways are these changes affecting corporate behavior, firm-level competitiveness, and regional economic growth and development?
· What are the impacts of these changing patterns and processes on people and places in both developed and developing nations and regions? What are the impacts of trade and industry policies on regional economic growth and development, and what are the implications of regional economic integration on national growth prospects? And, finally, what are the key issues and challenges facing nation states and corporations in the areas of finance, trade, border security, the movement of capital and labor, and the environment?
To address these (and other) questions, emphasis will be placed upon the actions and interactions of business enterprises and government regulatory and policy-making organizations and institutions at local, national, and international levels. Moreover, we will examine the impacts of these processes and relationships upon the location of economic activities, firm-level competitiveness, and the economic growth and development of regional industrial systems. Therefore, the following interrelated topics are important as we explore these issues:
· Appreciating the diversity of actors in the new space economy;
· Viewing international commerce from varying spatial scales of resolution;
· Examining spatial shifts and the geographical and institutional re-organization of economic activity;
· Understanding the interrelationships among global competitiveness, corporate coping mechanisms, and government policymaking;
· And, modeling corporate behavior, industry transformation, global-local interactions, and regional economic growth and development.
Class format and Reading requirements
A lecture/discussion and student presentations format is used in the course. Participants are expected to attend all of the classes and contribute to classroom discussions.
The required texts for the course are: (1) Peter Dicken. Global Shift: Reshaping the Global Economic Map in the 21st Century (NY: Guilford, 2003). ISBN: 1-57230-899-0 (paper); and (2) T.Koh and C.L.Lin. The U.S.-Singapore Free Trade Agreement: Highlights and Insights (Singapore: Institute of policy Studies and World Scientific Publishing Co, 2004). ISBN: 981-238-848-6 (paper).
Keeping in touch with the “real world” of international business
Emphasis will be given to present-day events and issues within the international community. Therefore, class members are encouraged to examine on a regular basis relevant newspapers, magazines, and various on-line news media. Examples of such sources include the following:
(1) Singapore-based news media: Business Times and Straits Times.
(2) Other Asian-based news outlets: Asia Times (on-line newspaper of events and trends in Asia: www.atimes.com); Asia-inc (monthly business magazine for Asian executives: www.asia-inc.com); Asia Media (media news and views from Asia Pacific: www.asiamedia.uda.edu); and Asian Business Strategy News (Asian business and marketing intelligence news, columns, and research articles: www.apmforum.com).
(3) U.K-based news media: Financial Times and The Times.
(4) Canada-based news media: The Globe and Mail
(5) U.S.-based news media: The Journal of Commerce (http://www.JOC.com); Business Week (http://www.businessweek.com/globalbiz ); and The Economist (http://www.economist.com).
(6) In addition, see the attached list (page 9) of recently published books that will serve as background references for much of the course. [You should have read all of these books by the end of the summer session. Woops: just kidding!!!]
If you wish to contact me during the summer session, please feel free to utilize e-mail (see my address above) or visit me in my office. In addition, the course outline and weekly assignments, are available on my webpage: http://www.buffalo.edu/~geojem/ Also, I may be communicating with you from time to time via e-mail using the University at Buffalo’s "UBLearns course management system, “ and all of us will be using the “Discussion Board Forum” on UBLearns.
Assessment: Class Attendance, Examinations, Individual-Group Discussion Projects, and Grading Policy
Throughout the summer session, each participant in this course is expected to attend classes regularly, read all of the assigned readings, participate in classroom discussions and exercises, complete two exams, and participate actively in the “individual-group discussion” projects. The overall assessment of student performance in the course is as follows: The midterm and final exams are valued at 35 and 35 percent, respectively, of the final course grade. The individual contributions to the group projects are valued at 30 percent of the final course grade, which includes 10 percent for regular classroom participation.
Exams: The two exams are tentatively schedule to occur on June 8 and June 27. These exams will consist of both multiple-choice questions and questions that require relatively short, paragraph-type essay responses. The questions will be based upon the assigned chapters in the textbook and other supplemental reading materials, class lectures and discussions, student and group on-line and in-class reports, and the contents of in-class videos.
Individual-Group Discussion Projects: Each person in the class is expected to participate as part of a small group and prepare both an individual report on a specific topic (see “Student papers” below) and work with the group to prepare a “Summary Review” of the same topic. Individuals in each group are responsible for posting both their individual and group reports on line using the “Discussion Board Forum” in UBLearns, which has been set up for this course. The individual reports from each of the groups are to be posted on the dates specified on page 8, and members of each group are to lead the class in a discussion of their individual reports. Each individual’s report is to contain a brief discussion of the topic, and must cite (and appropriately reference) at least two sources of information upon which the essay is based. (Internet sites may be used.) Each individual’s report is to be typed, must not exceed two pages in length (using 11-font, double-spaced typing), and is to be posted on the class Discussion Board on the date due. In addition, a “hard” copy of the report must by turned in to the instructor on the date due. (Note: no e-mails, faxes, or CDs will be accepted.) In addition, the members of each group are to work as a team and together produce and post on the Discussion Board a final “Group Summary Review” of their topic by June 22. The “Summary Review” is to provide an overview and assessment of the topic that carefully reports on and integrates not only the individual papers that were generated by the group, but also the contents of the classroom discussions that took place on the topic.
The grading policy will be as follows: A plus/minus grading system will be used in assigning final grades in the course. The scale that will be utilized in assigning final grades is set forth on the next page.
Letter Grade % Equivalent Interpretation
A 92.5 – 100.0 High Distinction
A- 90.0 – 92.4 High Distinction
B+ 87.5 – 89.9 Superior
B 82.5 – 87.4 Superior
B- 80.0 – 82.4 Superior
C+ 77.5 – 79.9 Average
C 72.5 – 77.4 Average
C- 70.0 – 72.4 Average
D+ 67.5 – 69.9 Passing Grade
D 60.0 – 67.4 Minimum Passing Grade
F 00.0 – 59.9 Failure
General UB Program Policies:
Everyone is expected to attend classes on a regular basis and complete the exams and individual and group projects when scheduled. In fairness to others in the class, late assignments, if accepted, will be penalized one full letter grade for each business day that they are tardy. Attendance and active participation is expected by all students in every class. Students are expected to be present for the entire duration of each class. Tardiness or absenting oneself during class will result in a deduction from the attendance and participation portion of the final grade.
Students who are absent from a midterm or final exam must formally request a make up exam in writing to the resident director and, if applicable, present a valid medical clearance. There will be no make ups for other course assessments, and students who are absent from such assessments will receive a zero. Make up exams will not be granted automatically but will be considered on a case-by-case basis, taking into account all the relevant circumstances.
UB Statement of Principle on Academic Integrity:
The University at Buffalo has a responsibility to promote academic honesty and integrity and to develop procedures to deal effectively with instances of academic dishonesty. Students are responsible for the honest completion and representation of their work, for appropriate citation of sources, and for respect for others’ academic endeavors. By placing their name on academic work, students certify the originality of all work not otherwise identified by appropriate acknowledgements. Additionally, students are expected to understand and abide completely by the following guidelines for academic integrity in all UB courses:
Plagiarism, cheating, and other incidents of academic dishonesty will result in an automatic failing grade for the course. Depending on the severity of the violation, your case may also be reported to UB for further investigation and may result in expulsion from the university. Plagiarism consists of copying work from another source without giving proper citations. You must not copy information from printed materials, internet sources, or from the work of other students. If you are uncertain about how to submit your work correctly, consult the instructor immediately. Any claim of ignorance of the rules of academic integrity by any student is unacceptable.
Special notes: Should you have difficulty with materials discussed in class or presented in the text, please let me know. I am most willing to help you, but I may not recognize that you are having difficulties. In addition, if you have a “diagnosed disability (physical, learning, or psychological),” which makes it difficult to carry out the course requirements, please let me know. Good luck to all!!
COURSE OUTLINE AND ASSIGNED READINGS
SECTION I: Introduction to the issues, structures, and shifts in world commerce
A. Overview of present-day major issues and challenges in world commerce for international companies and nation-state governments
Basic reading: Dicken, Chapter 1: “Introduction”
Discussion: World commerce: Major research themes, new books, unresolved questions, and relevant journals.
[Alert: “Bird flu virus may be spread by smuggling,” The New York Times, April 15, 2006. In this article, Elisabeth Rosenthal notes that: “There is increased evidence that a thriving international trade in smuggled poultry—including live birds, chicks, and meat--is helping spread bird flu.” So, world commerce means many things to many people: smugglers, bird watchers, disease-management professionals, and students of international business.]
B. Emergence of new organizations and spatial structures of global commerce: complex core-periphery structures, production networks, localization economies, and geographical clusters. The complex nature and force of “globalization.” Who are the primary “players” in global commerce? Is the “local” re-asserting its power over the global?
Basic reading: Dicken, Chapter 2: “A new geo-economy”
Discussion: The Center-Periphery model. Is the world getting flatter or spikier? Which countries countries are the most globalized, and how is globalization measured? What are the major issues in the globalization debate? Ohmae’s 2005 text: “The next global state: challenges and opportunities in our borderless world.”
Student papers: on globalization and the “drivers” of globalization
C. Global shifts underway in world commerce and economic activity: shifts in production (manufacturing and services), trade, capital, and people within and between nation-states
Basic reading: Dicken, Chapter 3: “The changing global economic map”
Cases & discussion: The U.S. auto industry; R. Florida’s book: “The flight of the creative the class: the new global competition for talent” (20050. Singapore’s “growth triangle.” Texas-Mexico maquiladora cities: competitive or complementary?
Student papers: on shifts (changing locations) in world commerce
SECTION II: The bases of world commerce: Underlying “forces” and “actors”
A. Technology, innovations, and technological change
Basic readings: (1) Dicken, Chapter 4: “Technology: the great growling engine of change.” (2) Koh and Lin, Chapter 1: “The USSFTA: A personal perspective;” and Chapter 2: “The USSFTA: Personal perspectives on the process and results;” Chapter 3: “Lessons from the USSFTA negotiations;” and Chapter 4: “The USSFTA: The socio-political context.”
Discussion: The geography of innovations. Technological change in transportation: Marc Levinson’s book, “The Box: How the shipping container made the world smaller and the world economy bigger.” Who are the actors and what are the forces and motivations underlying the Singapore-U.S. Free Trade Agreement?
Student papers: on the role of technology and technological change in global commerce
B. The state (government) as container, regulator, competitor, and collaborator
Basic readings: (1) Dicken, Chapter 5: “The state is dead: Long live the state; (2) Dicken, Chapter 6: “Doing things differently: some examples from different parts of the world;” (3) Koh and Lin, Section II (Chapters 6-15)
Discussion: The state and commercial (trade, industry, and foreign direct investment ) policies—in theory and practice). Rivoli’s “travels of a T-shirt.” Krugman and Porter on national competitiveness and Porter’s “diamond plus two” model of national competitiveness. The theory of regional economic integration, and the prospects for a Free Trade Area of the Americas (given the recent changes in government leadership in South America).
Cases: (1) Dicken’s Chapter 7 on the “older industrialized economies world (e.g., U.S., EU, Japan) versus the “newly industrializing and emerging market economies (NIEs, South Korea, Taiwan, Singapore, China, Mexico, and Eastern Europe);” and (2) Koh and Lin’s Section II on the contents of the USSFTA
Student papers: on the role of government in influencing world commerce.
C. The transnational corporation and global competitiveness
Basic reading: Dicken, Chapter 7: “TNCs: the primary ‘movers and shapers’ of the global economy”
Discussion: Evolution of transnational corporations and the transnationality index. The FDI decision process. The role of “place” in the strategic decisions of TNCs. Dunning’s “eclectic” paradigm. TNC organization and geographical embeddedness. The “China price." The nature and outreach of East Asian
Student papers: on TNCs in East Asia
SECTION III: TNCs and Nation-States: Competition, conflicts, and cooperation
A. Networks of relationships within and between corporations and nation-states: foreign direct
investments, various forms of strategic alliances, offshore outsourcing, sweatshops, corporate and
regional headquarters, and transnational production and trade networks.
Basic readings: (1) Dicken, Chapter 8: “Webs of enterprise: the geography of transnational production networks.”
Discussion: Configuring the firms’ internal production network. The geography of reorganization and restructuring. TNCs locked into external production networks of relationships. On regionalizing transnational production networks. Production networks of Singapore-based TNCs [See: H.Wai-chung Yeung,“Organising regional production networks in Southeast Asia: implications for production fragmentation, trade, and rules of origin,” Jo. of Economic Geography, Vol. 1 (2001), 299-321.]
Student papers: on “networks” of corporations
B. Is the world “flat”?? Transnational corporations versus nation-states, nation-states vs. nation-states, and nation-states and TNCs vs. regions: On the role of spaces and places.
Basic reading: Dicken, Chapter 9: “Dynamics of conflict and collaboration: Both TNCs and states matter.”
Discussion: Conflicting objectives. Impacts of TNCs on host and home countries. The bargaining relationships between TNCs and nation-states. The region as "place." An alternative view of Thomas Friedman’s thesis, “The World is Flat.” Peter Buckley,etal, “China’s inward foreign direct investment success: Southeast Asia in the shadow of the dragon,” The Multinational Business Review, Vol. 13, No. 1
(Spring, 2005), 3-31. Chi Hung Kwan, “The rise of China and Asia’s flying-geese pattern of economic development: An empirical analysis based on US import statistics,” Nomura Research Institute , No. 52 (August, 2002), 1-12.
Student Papers: on interactions between TNCs and nation-states
C. Transactional costs associated with cross-border trade: Is increased concern over security trumping efficient global commerce?
Basic reading: Class discussions only.
Discussion: McConnell, “The costs to the US economy of import restrictions and increased national security; and MacPherson, McConnell, Vance, and Vanchan, “The impact of US government anti-terrorism policies on Canada-U.S. cross-border commerce,” The Professional Geographer (forthcoming, 2006).
Student Papers: on the role of security in world commerce
SECTION IV: Winners and Losers in the Global Economy: Industry sectors, populations, corporations, and nation-states
A. Winners and losers: Global shifts in selected manufacturing sectors
Basic readings: (1) Dicken, Chapter 10: “The textile and garments industries;” (2) Koh and Lin, Chapter 8, “Textiles and apparel;” (3) Dicken, Chapter 11: “Wheels of Change: the automobile industry;” (4) Dicken, Chapter 12: “The semiconductor industry.”
Discussion: Production chains, global shifts (the geography of trade), market dynamics, production costs and technology, the role of the state, corporate strategies, and regionalizing production networks in three manufacturing sectors.
Student papers: on one of the above industry sectors (textiles, autos, or semiconductors)
B. Winners and losers: Global shifts in selected services sectors
Basic readings: (1) Dicken, Chapter 13: “Financial services industries;” (2) Koh and and Lin, Chapter 10: “Financial services and capital controls; (3) Dicken, Chapter 14: “Making the connections, selling the goods: the distribution industries.”
Discussion: Production chains, global shifts (the geography of trade), market dynamics, production costs and technology, the role of the state, corporate strategies, and regionalizing production networks in two services sectors.
Student papers: on one of the above services sectors (financial services or distribution industries)
C. Winners and losers: Summary and overview of the impacts of globalizing processes
Basic readings: (1) Dicken, Chapter 15: “Winners and losers: An overview;” (2) Dicken, Chapter 16: “Making a living in developed countries;” (3) Dicken, Chapter 17: “Making a living in developing countries;” and (4) Koh and Lin, Section III (“Getting the FTA through Congress”) and Section IV
(“Implementing the FTA”).
Discussion; What are the consequences resulting from the transformations to world commerce that are related to three interconnected processes: technological change, the role of the state, and the decisions of TNCs? What are the impacts of these processes upon sustainable economic growth and development,
world poverty, cross-border migration policies, employment prospects, trade and investment policies, and the environment? What are the likely impacts of the USSFTA upon Singapore’s government-linked companies and the overall corporate scene, and upon U.S. companies and U.S. efforts to build more formal trade linkages with the ASEAN bloc of nations?
Student papers: on future trends and prospects for “actors” and processes associated with world commerce.
Tentative Schedule of Assignments and Exams by Week/Day
(See the “course outline” above for specific topics.)
Week #1 
Tuesday, May 23: 9:00-12:45 Section I-A
Thursday, May 25: 9:00-12:45 Sections I-B and I-C
Week #2 [4}
Tuesday, May 30 9:00-12:45 Sections II-A and II-B
Thursday, June 1, 9:00-12:45 Sections II-B, continued, and II-C
Week #3 
Tuesday, June 6, 9:00-12:45 Section II-C, continued
Thursday, June 8, 9:00-12:45 Review and midterm
Week #4 
Tuesday, June 13, 9:00-12:45 Sections III-A, B, and C
Thursday, June 15, 9:00-12:45 Sections IV-A and B
Week #5 
Tuesday, June 20, 9:00-12:45 Sections IV-B, continued, and C
Thursday, June 22, 9:00-12:45 Section C, continued, and review
Week #6 
Tuesday, June 27: 10:00-12:00 Final exam (10:00-12:00)
Group Topic___________________________________ Date due
Group A on globalization and the “drivers” of globalization [May 25]
Group B on shifts (changing locations) in world commerce [May 25]
Group C on the role of technology and technological change in
world commerce [May 30]
Group D on the role of government (the state) in influencing
world commerce [May 30]
Group E on transnational corporations in East Asia [June 6]
Group F on networks of corporations [June 13]
Group G on interactions between TNCs and nation-states [June 13]
Group H on the role of security in world commerce [June 13]
Group I on textiles, automobiles, or semiconductors [June 15]
Group J on financial services or distribution industries [June 15]
Group K (?) on future trends and prospects for “actors” and
processes associated with world commerce [June 20]
Groups A-? Group “Summary Reviews” [June 22]
Some recent publications that may be relevant for students interested in international business
* T.L.Friedman. 2005. The World is Flat: A brief history of the 21st Century (N.Y. Farrar, Straus, and
* M.Levinson. 2006. The Box: How the shipping container made the world smaller and the world
economy bigger (Princeton, NJ: Princeton University Press).
* C. Fred Bergsten. 2005 The United States and the World Economy Foreign economic policy for the
next decade (Washington, D.C.: Institute for International Economics).
* Richard Florida. 2005. The Flight of the Creative Class: The new global competition for talent (NY:
* Oded Shenkar. 2005. The Chinese Century (Upper Saddle River, NJ: Wharton School Publishing).
* Kenichi Ohmae. 2005. The Next Global State: Challenges and opportunities in our borderless world
(Upper Saddle River, NJ: Wharton School Publishing).
* Ron Hira and Anil Hira. 2005. Outsourcing America: What’s behind our national crisis and how we
can reclaim American jobs (NY: American Management Association).
* George T. Haley, U.C.V. Haley, and C.T. Tan. 2004. The Chinese TAO of Business (Singapore: John
* Peter Andreas and Thomas J. Biersteker. 2005. The Rebordering of North America: Integration and
exclusion in a new security context (London: Routledge).
* Steve New and Roy Westbrook (eds.). 2004. Understanding Supply Chains: Concepts, critiques, and
futures (London: Oxford University Press).
* Francois Bourguignon, F.H.G. Ferreira, and N. Lustig (eds.). 2005. The Microeconomics of Income
Distribution Dynamids in East Asia and Latin America (Washington, D.C.: The World Bank and
Oxford University Press).
* Robert N. Gwynne and Cristobal Kay. Second Edition, 2004. Latin America Transformed:
Globalization and modernity (London: Edward Arnold).
* I.M. Destler. Fourth Edition, May, 2005. American Trade Politics (Washington, D.C.: Institute for
* D.Johnson and C. Turner. 2003. International Business: Themes and issues in the modern global
economy. London: Routledge. [Paperback. ISBN: 0-415-24890-6]
* G.P. Sampson and S. Woolcock (eds.), 2003. Regionalism, multilateralism, and economic
integration: The recent experience. N.Y.: United Nations University Press. [Paperback. ISBN:
* P. Rivoli. 2005. The travels of a T-shirt in the global economy. NJ: John Wiley & Sons.
[Cloth. ISBN: 0-471-64849-3]
* D.A. Irwin. 2005. Free Trade Under Fire. (Second Edition) Princeton: Princeton University Press.
[Paperback. ISBN: 0-691-12247-4]
* International Chamber of Commerce, 2003. Guide to Export-Import Basics. N.Y.: ICC Publishing,
Inc., 2nd edition.
* Quayes and Pescatrice. 2004. “North American border trade in a heightened security regime,” in
Canadian Jo. of Regional Science (Spring), pp. 49-60
* J. Pantulu and J.P.H. Poon. 2003. “Foreign direct investment and international trade: evidence form
the US and Japan,” Jo. of Economic Geography, Vol. 3, No. 3, pp. 241-259.
* K.D. Boyer. 1997. “Americana trucking, NAFTA, and the cost of distance,” Annals of the American
Academy of Political and Social Science, Vol. 553 (September, 1997), pp. 55-65. [The author argues that trucking costs now determine the economic geography of North America. Any deployment of ITS/CVO technologies that can substantially affect highway costs will generate considerable locational and regional advantages. Logistical costs of transportation and distribution have become so important that they influence the location of production facilities for
a particular industry throughout the continent.]
* J.J. Schott. 2004. Free Trade Agreements: US strategies and priorities. Washington, D.C.: Institute for International Economics.
* A. Estevadeordal, D. Rodrik, A.M. Taylor, and A. Velasco. 2004. Integrating the Americas: FTAA and beyond. Cambridge, MA: Harvard U. Press.
* “UN Commodity Trade Statistics Database (UN Comtrade), 2005. International trade data for some 130 countries may be obtained at: http://unstats.un.org/unsd/comtrade (retrieved 6/14/05).