There is so much ideology surrounding this notion, and its implications, that it is essential to characterize globalization precisely, and then determine its extent and evolution in empirical terms (see Hirst and Thompson, 1996). Although globalization is multidimensional, it can be better understood starting with its economic dimension. A global economy is an economy whose core activities work as a unit in real time on a planetary scale. Thus capital markets are interconnected worldwide, so that savings and investment in all countries, even if most of them are not globally invested, depend for their performance on the evolution and behaviour of global financial markets.
In the early 1990s multinational corporations employed directly only about 70 million workers, but these workers produced one third of the worlds total private output, and the global value of their sales in 1992 was US$ 5,500 billion, which is 25 per cent more than the total value of world trade in that year (Bailey et al., 1993). Therefore multinational corporations, in manufacturing, services, and finance, with their ancillary networks of small and medium businesses, constitute the core of the world economy.