With the growing level of globalization and decreased communications costs, it became now possible to analyze the economic activities in industries and sectors using the overall stock performance on the global agenda. To be more specific, Malaysian business cycle in industrial sector has an asymmetric property.

Given the presupposition that an increase in the stock market is an indicator of growth and profitability in the long run, it is possible now to analyze the internal economic processes in a given country or industry using the data on the global stock market. The major cyclical variables resulting from unemployment and production display asymmetric behaviour in Malaysia, and the global stock market indicators can be used to analyze and predict the influence of the cyclical variables. Given Malaysia being one of the major trading partners of ASEAN countries, the results can be used for foreign and local decisions makers. As such, globalization of the stock market that exists without time and space constraints can be used as an effective tool to analyze the performance of developing countries worldwide and further stimulate foreign investment and in such way increase the level of interconnectedness.


At the same time, increased globalization leads to a distinct need for standardized reporting. Swedish, Dutch, German, and French companies listed on the London Stock Exchange now represent over 500 securities for the total of 20% share of the market. Interestingly, while previously London Stock Exchange requirements were crucial for objective reporting, with the increased level of globalization and, consequently, competition, the requirement for transparency is regulated by the industry itself. Competitive pressures to raise capital drive further globalization across all European countries that significantly exceed requirements for voluntarily disclosure. Every Sweden and French company report has at least one page dedicated solely to capital market data and social reporting. Consequently, globalization of stock market drives further standardization, which, in its turn, contributes to faster integration of stocks into the global marketplace.


We can go even a further back and argue that globalization, in the logic of a growth in interconnectedness between members of different states, is itself only a special case of something more universal. In medieval Europe most people for most-of the time stayed close to where they were born. They inspired mainly local goods and, primarily, produced either for themselves or for a very local market. Economies were mainly local. Trade over considerable distances took place on water either by sea or river, which accounts for the inconsistent number of towns and villages which were either by the sea or on rivers. Human beings seem to have had a steady urge to detach themselves from the area as much as the technology of the day permitted. Certainly there have always been big movements, sometimes of populations looking for better circumstances and of conquerors building empires. Under the Roman Empire, large parts of Europe were ‘globalizing’ in this sense and the degree of globalization declined with the Empire’s retreat. The medieval Church could be seen as several form of globalizing force but the degrees of interaction and interdependence were much reduced in the so-called Dark Ages.



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