on firm performance in pharmaceutical sector

Impact of Globalization On Welfare Of the State Case Of Pakistan18

Impact of Globalizationon The Welfare State of Pakistan

A thesis submittedByFaizan Hussain (8141)ToDepartment of Business AdministrationIn partial fulfillment ofThe requirement for theDegree ofMASTER OF BUSINESS ADMINISTRATIONIn FinanceThis thesis has beenAccepted by the facultyFACULTY OF BUSINESS ADMINISTRATION

Syed Ali RazaAdvisor

Syed Ali RazaManager Research

Acknowledgment

Firstly, I would like to express my sincere gratitude to my supervisor Mr. Syed Ali Razafor the continuous support in completing my Thesis and related research, for his patience, motivation and immense knowledge. His guideline helped me in all the time of research and writing of the thesis. I could not be able to complete it without his advisory. Besides my advisor, I would also like to thank to Mr.Arshiyaan for their valuable guidelines related to my research work. I thank my class colleagues for the stimulating discussions, their views and suggestions and for all the fun we have had in our entire session of Thesis. Last but not least, I would also like to thank my parents and siblings. They were always supporting me and encouraging me with their best wishes including my Manager for approving my casual leaves for the Thesis work.

Table of ContentsAcknowledgmentiAbstractiiiChapter # 11Introduction11. Introduction21.1 Background21.5 Scope of the Study41.6 Limitation of the Study5Chapter 26Literature Review62. Literature Review72.1. Theoretical Background72.2. Empirical Studies9Chapter 318Methodology183. Methodology193.1 Research Approach19This examination has based upon quantitative exploration procedure includes the observational investigation of gathered information strategies It is an examination connected on the numerical type of information The gathered information changed over in to numbers to determine it endurably. This methodology is connected when discoveries of finding of the examination will be recognized is connected when discoveries of finding of the examination will be recognized by measurable strategy the study instrument updated was further presented by distinctive industry experts Likert scale of five point was produced for everything that mirrored the level to which strategies utilizes by the buyer to chosen and participated in association with supplier were measured critical to their sourcing exercise or the level to which the relationship were fruitful in helping the buyer accomplish its objective.193.2 Research Purpose193.3 Research Design193.4 Data Source193.5 Target population203.6 Sample Size203.7 Collection Techniques/Tools Data203.8 Data collection instrument203.9 Statistical Techniques20

Abstract

In the research of explanatory analysis the purpose of this exploration is to identify the impact of globalization on welfare state ofPakistan. For this purpose data over the period 1967 to 2014 is used to empirically investigate the relationship between globalization and welfare of the state. Welfare effort is studied in termsof jointly public spending and taxation. Total trade, imports, foreign direct investment, and financial market integration are the variables for the measurement of globalization. Thestudy identifies the benefits and drawbacks of globalization for the welfare of the stateof Pakistan. This research will help the state of Pakistan to make suitable policies in order to reduce the effect of globalization.

Keywords: Public Spending, taxation, trade, imports, foreign direct investment.

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Chapter # 1Introduction

1. Introduction1.1 BackgroundThe government which spends on goods and services for the welfare of the public of the state is termed as welfare state. In this paper we determined welfare of the state as public spending, social service provisions, income transfer programs and taxation. Government do public spending from its earnings and it includes spending on the basic needs of the public like food, education, employment, health, safety, social services and income transfer programs. The government major earnings are generated by its taxation system so therefore they collect taxes from individuals, AOPs and companies which make them able to spend on public welfare. On the other hand, welfare of the state is interrelated with globalization. Globalization has the impact on the whole of the economy of the country in terms of social, cultural, political and economic aspects. It is defined as a process of rapid economicintegration among countries driven by the liberalization of trade, investment and capital flows, as well as technological change [Torres, R (2001)]. Globalization has increased its Importance now days. ORourke and Williamson (2000) point out that the world economy even by the late 20th century standard was well integrated in the beginning of the twentieth century [Kemal (2001)].World economies were tend to move towards globalization after the first world war and the golden years of the 1950s and 1960s.After the second world war WTO(World Trade Organization) is formed in continuation with ITO (International Trade Organization) to help and support liberalism, multilateralism and nondiscrimination. This then shows a tendency towards globalism [KatsuniSugiura (1999)]. In this paper we analyzed Globalization in terms of total trade, imports, foreign direct investment, and financial market integration. The relationship between globalization and the welfare state is highly composite, economic internationalization has greater implications and it needs to be understood for the long-term sustainability of welfare states. This article aims to clarify some of the theoretical and empirical contradictions and also to point out a simple fact that is, arguably, not always acknowledged in the relevant literature. The alliance between globalization and the welfare state is highly unexpected and active, i.e., it changes over time. Welfare state policies must be adaptive with regards to economic internationalization in respective areas of importance like trade, imports, foreign direct investment and financial market integration. Welfare of the state is concerned with large number of policy fields and globalization has affected those fields differently from one another so in order to control the effect of globalization state needs to make relevant policies. Three schools of thought that have dominated the scholarly debate in the past decades are introduced: first, the compensation thesis, they show the result that the globalization has positive effect on the expansion of welfare state, which is totally against the results of efficiency thesis i.e. the negative relationship. Skeptics the third school, they claim that the effect of globalization on welfare of the state is weak or nonexistent as the domestics politics and institutions has greater impact.1.2Problem StatementWhat collection of welfare state policies enables us to balance the trash from globalization without harming motivation to work and obtain talent? What is the suitable position of the state in the condition of welfare services? Many Researchers have identified the importance of the topic of globalization impact on welfare of the state, (Naima Saeed 2006) this paper show that it is extremely important to identify the relationship between globalization, economic development and social progress.(Bonaglia et al., 2001) How to incorporate globalization with governance concerning globalization a key unsettled issue. Impact of Globalization on Governance is still a controversial issue and needs to be resolved. Bonaglia et al. (2001) it is argued that an important aspect of governance-globalization nexus is a connection of trade openness to domestic institutions. The state required to liberate authority because of the demands on the state to shift towards globalization and for making business decision state control above the provision of information, communication and to authorize global organizations (Saich, 2000). As the socioeconomic and political implication of globalization is very firm, the debate on this topic is expected to go on for years. Every time when any meeting is held at World Trade Organization, IMF, or World Bank platforms, the discussion is divided into the group and rival of globalization and consent on the effects of globalization remains an unattainable assignment (Akhter, 2004). In the face of this uncertainty, this study is an attempt to lend an empirical support to this ongoing discussion in particular reference to its effects on welfare of the state and quality of institutions of economies, to understand why globalization should affect the quality of state policies regarding public spending, social service provisions, income transfer programs and taxation system in Pakistan. In this paper I use high frequency data to examine the connection between globalization and welfare of the state of Pakistan. 1.3 Research ObjectiveThe objective of this paper is to help improve understanding of the effectsof the globalization on the welfare of the state in terms of government policies related to public spending, social service provisions, income transfer programs and taxation of Pakistan.1.4 Research QuestionCanglobalization be seen as positive or negative for the Welfare State of Pakistan?1.5 Scope of the StudyThe scope of this research is to identify advantages or disadvantages if any of the globalization on welfare of the state in Pakistan. Globalization has had a dual effect on the welfare of the state. Since 1945, in a normative structure of individual rights a part of the state towards its citizens implanted a sense of responsibility.Over a certain region Welfare of the state is the supreme power, by a number of forces operating beyond the nation state this supreme power has been challenged by these forces such as the threat of global terrorism, the challenges of climate change, and the powers of international organizations to influence on the global market, given the impact on thenational economic policy of the global financial crisis. More clearly globalization of economy has been restraining the capability of states to decide their own policy related to trade, economic integration and financial markets.States are forced to cut labour costs, decrease the price of goods and services and reduce tax rates to make their domestic market more competitive, and to shrink the size and scope of the welfare state because of the rising pressure of international rivalry in trade markets as well as the increased mobility of capital and multi-national businesses.1.6 Limitation of the StudyThis research has its limitation of evolving only around State of Pakistan.This has the span of 48 years besides lacking time and budget, data has been collected from the source website of state bank of Pakistan.

Chapter 2Literature Review

2. Literature Review2.1. Theoretical BackgroundIn the middle of the previous two decades, most industrialized nations have encountered real changes in their welfare frameworks as a result of restricted financial development. This, thusly, has prompted an assortment of endeavors to change the establishments of the welfare state in numerous nations. Globalization achieved another connection for welfare approaches. Globalization implies not just changes in the properties of countries, for example, increment in the measures of exchange and coordinates outside venture, additionally changes seeing someone among countries. It is a generous worldwide move that develops the interdependency among countries and increases rivalry between them. A key supposition basic the present study is that globalization has set gigantic weights on countries to seek after more effective and adaptable operations of their economies. Between the 1980's in Anglo-Saxon nations, for example, the U.S and U.K., "Reaganomics" and "Thatcherism" are illustrative instances of the conservation of the welfare state. Conversely, Sweden and Germany have kept up their past welfare frameworks, picking incomplete change, as opposed to conservation. Extensions of welfare strategies have additionally been seen in a few nations, for example, Spain, Portugal and Korea. 2.2 Empirical StudiesThere are huge literary works on the issues of globalization effects on welfare of the state. Because of Globalization national economies are turning out to be bit by bit uncovered, subordinate with different nations and receptive to universal monetary effects (Mishra, 1998). In the period of globalization, Hirst and Thompson (1996) affirm, national economies stop to exist on the grounds that they are subsumed into the worldwide monetary framework. Creation gets to be worldwide, companies get to be stateless, and national governments can no more manage or control these worldwide partnerships. As a nation's welfare approaches had for the most part been reliant on a generally shut economy, globalization gives new weights and difficulties to welfare states. As to effects of globalization on welfare state, there are two primary inquiries (Mishra, 1998). To start with, does expanding financial openness and interdependency between countries deny country conditions of their strategy self-governance - the capacity to make social approach in its own way? Second, does globalization decrease the welfare state as countries contend with each other in the universal commercial center? With respect to inquiries, late studies can be ordered into three camps. Some contend that the opening of economies has reduced the self-rule of country states to decide monetary and social approach identified with full business and financial development (Mishra, 1998). A neoliberal contention asserts that universal rivalry makes economies with liberal welfare states uncompetitive and requires more productive and little governments (Pfaller, 1991; Pierson, 1991). These obliging impacts of globalization highlight two components (Garrett and Mitchell, 1999); 1) expanding rivalry in worldwide markets 2) the capacity of the capital holders to move cash and generation around the globe in quest for higher returns. Expanding rivalry makes a weight on cost effectiveness and interest for government to diminish the expense of welfare strategy. The 'footloose capital' can without much of a stretch sidestep the expense of expansive welfare state by leaving the nation. Governments must choose the option to acknowledge the requests of business sectors and diminish welfare state policies. Thus, this viewpoint proposes that globalization has undermined social security and additionally full occupation and generously compensated employments. Garrett &Mitchell (1999) call this point of view a 'productivity theories. A second gathering of researchers contend that, despite the development of globalization, the impact on rebuilding of welfare states is unassuming (Schwartz, 2001). Defenders of this methodology contend that the part of government won't be debilitated on the grounds that there is justifiable reason purpose behind government intervention. As per Garrett & Mitchell (1999), this methodology is known as a 'remuneration speculation's and clarifies why there won't be a decline in the welfare state. This point of view spotlights on the issue created by globalization and the positive reactions of governments (Katzenstein, 1985; Rodrik, 1997). As business sector combination tends to expand imbalance and financial insecurity, it makes solid motivating forces (or requests) for governments to decline market separation utilizing welfare state policies. Vulnerability to outside monetary stuns empowers the development of a liberal social security net to shield subjects from such stuns (Cameron, 1978). Expanding welfare state endeavors mitigates market weights and keeps up open backing for globalization. At last, defenders of a third point of view, including Iverson (2001) and Pierson (2001), are more farfetched about globalization's consequences for national endeavors to change their welfare systems. This approach additionally concentrates on national politics and hobbies of related on-screen characters and takes a perspective that the impacts of globalization are interceded by residential welfare state courses of action. Fancy (1998) contends that market-arranged liberal welfare states (Canada, U.S., Australia, and U.K.) have been under descending weights by capital portability while the weight are either missing or positive in Continental Europe (Germany, and France) and Scandinavian nations. In addition, they underline that a considerable lot of the weights on the welfare state are wrongly ascribed to globalization. For instance, Iverson (2001) states that 'post-industrialization' - move into an administration bases economy - instead of globalization is a more significant driving force of the late change. The principal camp expects that globalization has changed the general situations of welfare state procurement. Notwithstanding, this contention neglects to clarify how the effects are exchanged to individual nations and why there are distinctive reactions to these worldwide weights. The second endeavors to supplement the deficiencies of the 'efficiency thesis. Expecting the positive part of government, they attempt to discover mediating components that impact the determination of particular national procedures. Regardless of an alternate contention, the third camp represents that household organizations are significant in intervening the effects of globalization. This study is an endeavor to consolidate these contending hypothetical viewpoints on the impact of globalization on changes in countries' ways to deal with transforming their welfare states. Concerning outer impacts of globalization, system investigation makes it conceivable to clarify the general changes in universal relations and produces a 'globalization marker, for example, 'worldwide exchange requirement' and 'worldwide speculation limitation' variables, which measure the level of imperatives for every country in a globalized economy. Countries don't exist autonomously however consistently interface with different countries in the worldwide system. Exchange and remote direct speculation are ordinary monetary exercises between countries. Despite the fact that there has been an agreement on the meaning of globalization underlining the feature of developing interdependency between countries, most estimations of globalization utilize the characteristics of individual countries, for example, the measures of exchange and the volumes of streams of outside direct venture (Huber, Ragin and Stephens, 1993; Garrett and Mitchell, 1999; Huber and Stephens, 2001). Going before studies on globalization impacts endeavor to clarify the variety of government uses and incomes utilizing these variables. These studies are defective in that they don't make note of the impact of changing worldwide systems in which every country is installed. The outside impact of globalization is decreased into properties of every country and these estimations overlook the dynamic procedure of globalization. Countries are working in the limitation of worldwide exchange system or worldwide venture system. The worldwide exchange system, which comprises of the connections among fare and import countries, impacts every country. A country copious in iron, for instance, trades it to different countries requesting it. These ceaseless exchange game plans, for example, importing common assets and sending out items, constitute worldwide exchange systems. Globalization, as far as exchange, means expanding exchange among countries and, therefore, improves interdependency among countries. The worldwide speculation system is like this. Globalization expands the thickness of worldwide exchange organizes and influences the reaction of every country. The position of a country in the system impacts the example of rivalry. It additionally affects chances to expand the opposition advantages and return of speculation. The exchange system lets us know something imperative, for example, how exchange benefit will be disseminated among countries include in it. There are spots where the items can be sold for significantly more than it expenses to make it. The more the quantity of other remote nations that import or trade the items and the more they are disrupted and don't have cozy connections among them, the more the country takes a self-ruling status among them. More independent position of the nation empowers it to arrange more good costs, and appreciate more noteworthy measure of exchange edge than less self-governing nations (or more obliged nations). At the point when the country can arrange an extraordinary manage import nations or shift the exchange to less costly import nations, the country can build the exchange income. Then again, a country under high limitation (or low-self-sufficient) from other overwhelming exchanging nations experiences issues in arranging beneficial terms. High-limitation countries will have a minority offer in the exchange income. Along these lines, the structures of exchange system and the area of every country impact the country's odds of getting higher income from exchange. Worldwide exchange imperative is an idea that breaks down the level of limitation that originates from worldwide exchange system and the area of the country in it. Which position a country takes is the way to achievement in the exchange rivalry. Particularly a business position is an imperative asset accomplishing rivalry advantage in light of the fact that country going about as agent can control the arrangement, which supports it in the systems in which other taking an interest countries have no associations. The business has educational and control preferences that help the opposition dominancy (Burt, 1992). In this way, to know which position a country takes in the worldwide exchange system will help us to comprehend the exercises of the country. This study expects that the impact of globalization relies on upon the position of every country and the level of worldwide requirement every country faces. How does the worldwide system structure influence welfare state endeavors? The attributes of the worldwide system and one's position in it impact the key reactions of the countries and influence what sort of welfare state strategy the country will embrace.Reviewing the "effectiveness" and "pay" speculation, the welfare approach of every nation is impacted by the general system structures and the position of the country in it. At the point when a country is intensely compelled by different countries, it is liable to embrace a uninvolved adjustment technique, which conforms it to the requests of cash-flow to ask productive and little government. In this manner, welfare state arrangement will take a productivity interest technique that streamlines the welfare cost, which brings about bringing down welfare state use. Despite what might be expected, nations holding a predominant and self-ruling position with less limitation in the worldwide exchange system, will take a more positive procedure, which concentrates on legitimating and keeping up financial dependability. For whatever length of time that an association is not under the danger of serious rivalry, it doesn't look to augment effectiveness (Leibenstein, 1976). The country endeavors to acquire authenticity from an outer situation and also national legislative issues. Utilizing expanded incomes from exceptional yield on outside exchange, the nation actualizes liberal welfare state approaches to settle itself and keep up an upper hand in worldwide exchange. Along these lines, less compelled nations are liable to give more liberal welfare state uses. The examination above spotlights on the impact of the worldwide systems and its progressions on the welfare state endeavors. Without talk of the part of government and hobbies of related gatherings, in any case, the contention has an issue of exorbitantly underlining the deterministic impact of outer situations. Supplementing examination on the interior governmental issues and institutional design of welfare state could take care of this issue. These variables, which influence welfare state endeavors, are (a) political gatherings (b) state structures (c) ladies' work power support. Korpi (1989) contends that varieties in welfare state consumption and privileges among created nations could be clarified by the achievement of left gatherings, especially social majority rule parties, unified with solid exchange unions. As indicated by Huber and Stephens (2001), factional governmental issues are the most imperative element that records for the variety in welfare state results crosswise over nations. The prevailing political range of the occupant government: social vote based, Christian law based, or focus and right are essential determinant of the sort of welfare state. The cooperation between a solid union and social just gathering is a persuasive element of more generous, more universalistic, and more redistributive welfare state (Korpi and Palme 1998; Huber, Ragin and Stephens 1993). In Christian popularity based nations, Christian just gatherings endeavor to activate a working and bring down middleclass, especially when confronted with rivalry from left gatherings and unions for the average workers voters. These gatherings are real promoters of welfare state development. b) State Structures: Veto Points and Changes in Welfare State The structure of choice making coming about because of established procurements impacts the rebuilding of the welfare state (Huber and Stephens, 2001). Talking about the medical coverage approaches in Switzerland, France and Sweden, Immerged (1992) contends that political establishments shape the capacity of distinctive gatherings to activate power assets and impact the making of the strategy. Constitutions which make numerous "veto focuses" in the arrangement process - e.g. solid bicameralism, presidentialism and federalism, - moderates the pace of approach change, though constitutions with few or no veto focuses - unicameral, parliamentary - empowers more quick strategy changes (Huber and Stephens, 2001). Amid the rebuilding period, just countries with a couple veto focuses and preservationist governments experience emotional conservation. In actuality, for instance, Swiss with different veto guides drove toward the left blocking welfare state conservation arranged by government (Huber and Stephens, 2001). In Scandinavian nations, the larger amounts of ladies' work power cooperation have consequences for welfare state development through requests for better welfare state administrations and association with steady partners, for example, social majority rule party (Huber and Stephens, 2001). Expanding ladies' interest produces requests on family mind administrations, for example, general society procurement of day consideration and elderly care and parental leave protection. Extension of social administrations, thus, positively affects ladies' work power investment in light of the fact that it empowers more ladies to take an interest in the work constrain and makes requests for work around there. In this manner, the procurement of social administration actuated a self-strengthening process (Pierson, 2000). In opposition to Scandinavian countries, a few mainland European (or Christian vote based) nations commonly give liberal money advantages to families keeping up the customary male-provider family show. It suggests there is a probability that these nations give high welfare state consumption while keeping up generally low female vocation. Be that as it may, most nations have encountered expanding female livelihood. Expanding ladies' work power investment is related with the pattern of post-industrialism movement of occupation from assembling to benefit - and maturing populace. Upgrading ladies' job is used as a vehicle to adapt to diminishing work power coming about because of maturing populace and in addition to back welfare state (Myles and Quadagno, 2002)

Chapter 3Methodology

3. Methodology3.1 Research ApproachThis examination has based upon quantitative exploration procedure includes the observational investigation of gathered information strategies It is an examination connected on the numerical type of information The gathered information changed over in to numbers to determine it endurably. This methodology is connected when discoveries of finding of the examination will be recognized is connected when discoveries of finding of the examination will be recognized by measurable strategy the study instrument updated was further presented by distinctive industry experts Likert scale of five point was produced for everything that mirrored the level to which strategies utilizes by the buyer to chosen and participated in association with supplier were measured critical to their sourcing exercise or the level to which the relationship were fruitful in helping the buyer accomplish its objective.3.2 Research PurposeTo identify the benefits of buyer-supplier relationship in pharmaceutical industry, Explanatory research is used for this quantitative research.3.3 Research DesignTo identify the impact of supplier selection and Buyer-supplier engagement on relationship and firm performance in pharmaceutical industry we used Co relational Design.3.4 Data SourceTo recognize the effect of supplier determination and buyer-supplier engagement on relationship and firm execution in pharmaceutical sector Primary data collection is used through questionnaire.3.5 Target populationThis study is conducted on supply chain departments of pharmaceutical industry .so our target population is pharmaceutical industry.3.6 Sample SizeOur sample size is 251.3.7 Collection Techniques/Tools DataTo recognize the advantages of buyer supplier relationship in pharmaceutical industry we used questionnaire survey method.3.8 Data collection instrumentTo distinguish the effect of supplier determination and buyer-supplier engagement on relationship and firm execution in pharmaceutical sector we used survey questionnaire (Likert scale) for this study.3.9 Statistical TechniquesTo recognize the effect of supplier choice and buyer-supplier engagement on relationship and firm execution in pharmaceutical sector we used factor and multiple regression analysis.