International Business and Globalization in a Fragmenting World

International Academy
7 minutes ago
15 min read

Author: Sara El-Masri — Affiliation: Independent Researcher

Abstract

International business and globalization are undergoing a profound reconfiguration. For several decades, globalization was associated with trade liberalization, the expansion of global value chains, and the rapid growth of cross-border investment and production. In the 2020s, this narrative has become more complex. The world economy now combines continued integration—especially through digital trade and cross-border data flows—with rising geopolitical tensions, trade restrictions, data localization, and the “de-risking” or regionalization of supply chains. Recent international reports point to thousands of new trade-restricting measures, growing use of industrial policy, and an emerging pattern of “friendshoring” and nearshoring, even as world trade and digital commerce continue to expand.

This article examines how international business is adapting to this new phase of globalization. It uses three theoretical lenses to interpret current trends: Bourdieu’s theory of capital (economic, cultural, social, symbolic), world-systems theory (core, semi-periphery, periphery), and institutional isomorphism (coercive, mimetic, normative pressures). Drawing on recent literature and policy analyses published mainly in the last five years, the paper argues that globalization today is not simply declining or reversing; rather, it is being re-shaped into a more contested, multi-polar, and digitally mediated system.

The article is conceptual and structured like a Scopus-level journal paper. It first situates recent developments in international trade, investment, and digital flows, then applies the three theoretical frameworks to international business strategies—especially global value chain restructuring, digital platform expansion, and environmental, social and governance (ESG) practices. The analysis shows that multinational enterprises (MNEs) must simultaneously navigate geopolitical fragmentation, regulatory diversity, and institutional pressure for convergence on global standards. The findings highlight that economic outcomes remain deeply unequal across the world-system, but new forms of digital and cosmopolitan capital offer opportunities for some actors in semi-periphery and periphery regions. The article concludes that international business in the post-pandemic 2020s is best understood as globalization under tension: still expanding, but constrained and re-directed by politics, sustainability demands, and institutional forces.

1. Introduction

For much of the late twentieth and early twenty-first century, globalization was described in relatively optimistic terms. Expanding trade, foreign direct investment (FDI), and global value chains were credited with efficiency gains, technology diffusion, and poverty reduction in several developing regions. Many firms organized production and sourcing across multiple continents, taking advantage of differences in labor costs, regulatory environments, and market access.

In the 2020s, however, international business operates in a more contested environment. Several intertwined developments stand out:

Geopolitical tensions and trade restrictions: International institutions report a sharp increase in trade-restricting measures, with thousands of new restrictions imposed in a single year, nearly three times the levels seen before the pandemic.
De-risking, reshoring, and friendshoring: Governments and firms are reconsidering highly concentrated supply chains, exploring regional production, nearshoring, and alignment with “friendly” countries.
Digital globalization: Cross-border data flows and digital trade are growing faster than traditional trade in goods, with estimates suggesting digital trade value has risen from under five trillion to more than seven trillion dollars within a few years.
Regulation and data localization: Many countries are adopting stricter rules on cross-border data, privacy, and digital platforms, creating new forms of fragmentation in the digital economy.
Sustainability and ESG expectations: Investors, regulators, and civil society actors increasingly demand that firms demonstrate environmental and social responsibility, influencing where and how international business is conducted.

These developments have led to debates about whether the world is entering an era of “deglobalization,” “slowbalization,” or “re-globalization” along new lines. International organizations note that overall trade and digital flows continue to grow, but with more regionalization and greater policy uncertainty.

This article responds to these debates by asking: How are international business and globalization evolving in the current decade, and how can we make sense of these changes using Bourdieu’s theory of capital, world-systems theory, and institutional isomorphism?

To answer this question, the article:

Reviews recent developments in trade, investment, digital flows, and global value chains.
Uses Bourdieu’s framework to analyze how different forms of capital shape firms’ and countries’ positions in the global economy.
Applies world-systems theory to understand persistent inequalities and the restructuring of core–periphery relations.
Examines how institutional isomorphism explains convergence in practices such as ESG reporting and corporate governance among multinational enterprises.

The goal is not to produce a definitive empirical measurement of globalization, but to provide a conceptual map that helps academics, students, and practitioners understand the new landscape that international business faces.

2. Background and Theoretical Framework

2.1 The Changing Landscape of Globalization

In quantitative terms, globalization has not collapsed. International trade in goods and services is projected to grow in the mid-single digits annually in 2024 and 2025, after the pandemic-related contraction. Digital trade and cross-border data flows are expanding even faster, reinforcing the importance of intangible assets, platforms, and services in international business.

At the same time, qualitative features of globalization have changed:

The number of trade-restrictive measures has surged.
Industrial policy (such as subsidies for strategic sectors) has become more prominent.
Firms are re-evaluating complex value chains that depend on a small number of suppliers or transit routes.
Governments are linking trade and investment decisions to security, resilience, and climate goals.

These trends do not point to a simple reversal of globalization, but to re-structured globalization—more regional, more politicized, and more digital.

2.2 International Business in the 2020s

International business today is characterized by three major tendencies:

Reconfiguration of global value chains (GVCs)After experiencing disruptions from the pandemic, geopolitical tensions, and transport bottlenecks, multinational enterprises increasingly pursue diversification strategies. Nearshoring, friendshoring, and multi-sourcing aim to reduce dependence on single countries or routes.
Rise of digital and platform-based business modelsDigital platforms, cloud services, online marketplaces, and cross-border data flows allow even small firms to reach global customers. However, they also make companies more vulnerable to cyber risks, regulatory fragmentation, and sudden changes in data governance regimes.
ESG, legitimacy, and stakeholder expectationsEnvironmental, social, and governance (ESG) criteria are increasingly integrated into global strategies. Studies show that multinational enterprises face growing institutional pressures to align with global sustainability norms and to signal legitimacy through ESG disclosure and performance.

These tendencies do not affect all firms equally. Large multinationals with strong resources, digital capabilities, and lobbying power can adapt more easily to fragmented rules. Smaller firms, and those in less developed economies, often face higher compliance and adjustment costs.

2.3 Bourdieu’s Theory of Capital and Globalization

Pierre Bourdieu’s theory identifies several forms of capital beyond the strictly economic:

Economic capital: financial resources, physical assets, technology.
Cultural capital: knowledge, skills, qualifications, language ability, international experience.
Social capital: networks, relationships, alliances, and trust.
Symbolic capital: recognition, prestige, and legitimacy.

In the context of international business and globalization:

Multinational firms rely on economic capital to invest abroad, build global logistics, and acquire foreign companies.
Cultural capital is seen in the international education of managers, cross-cultural competencies, and the capacity to operate in multiple institutional environments. Recent work even speaks of “cosmopolitan capital,” emphasizing global exposure and multi-country careers among business elites.
Social capital underpins global networks of suppliers, distributors, joint ventures, and alliances.
Symbolic capital manifests as the reputation of firms and countries, international rankings, country-of-origin effects, and perceived reliability as trade or investment partners.

The distribution of these capitals across firms and nations strongly influences who benefits from globalization, who can shape its rules, and who remains vulnerable to shocks and policy changes.

2.4 World-Systems Theory: Core, Semi-Periphery, Periphery

World-systems theory views the global economy as a single system structured around a core of advanced, high-income states; a periphery of lower-income, resource-exporting, or labor-intensive regions; and a semi-periphery that shares features of both. Historically, core economies have dominated high-value manufacturing, finance, and technology, while peripheral economies supplied raw materials and low-wage labor.

In contemporary globalization:

Many core economies still host headquarters of major multinationals, high-technology clusters, and financial centers.
Several semi-periphery economies—such as large emerging markets—have become important manufacturing hubs and increasingly significant outward investors.
Periphery regions remain vulnerable to commodity price swings, climate shocks, and capital flow volatility.

Recent reports by international institutions note that while some developing countries have integrated into global value chains, others risk falling further behind due to limited fiscal space, slow recovery from the pandemic, and trade wars that disproportionately affect their exports.

World-systems theory highlights that globalization’s benefits and costs are unevenly distributed and that “re-globalization” through regionalization and friendshoring may reinforce or re-shape these hierarchies.

2.5 Institutional Isomorphism in International Business

Institutional isomorphism, introduced by DiMaggio and Powell, explains why organizations in similar environments become more alike over time. It identifies three mechanisms:

Coercive isomorphism: resulting from laws, regulations, and demands of powerful stakeholders.
Mimetic isomorphism: arising when organizations imitate peers during periods of uncertainty.
Normative isomorphism: driven by shared professional norms, education, and standard-setting bodies.

In the field of international business, recent work shows how non-financial reporting, sustainability disclosure, and ESG practices have become subject to strong isomorphic pressures. Regulatory initiatives—such as mandatory sustainability reporting—create coercive convergence; professional guidelines and rating agencies foster normative convergence; and firms often imitate ESG leaders to maintain legitimacy under conditions of global scrutiny.

These dynamics mean that even as globalization becomes more fragmented in geopolitical terms, corporate practices may converge around common templates—for example, adopting similar ESG reporting frameworks, supply-chain codes of conduct, and data protection standards.

3. Methodology

This article uses a conceptual and integrative methodology, suitable for synthesizing complex trends that cut across economics, sociology, and management. It does not present original quantitative data or case studies; rather, it organizes and interprets existing knowledge in a systematic way.

3.1 Literature Base

The analysis draws on three main types of sources:

Recent academic articles (primarily 2020–2025) on international business, de-risking, nearshoring, friendshoring, digital globalization, and ESG strategies of multinational enterprises.
International policy reports and economic outlooks from institutions such as the IMF, UNCTAD, OECD, and trade-related organizations, which provide up-to-date data on trade flows, digital trade, and regulatory changes.
Theoretical works in sociology and institutional analysis, including Bourdieu’s writings on capital, world-systems theory, and institutional isomorphism, as well as more recent extensions to digital capital and cosmopolitan capital.

3.2 Analytical Strategy

The conceptual analysis proceeded in three steps:

Mapping: Identifying key empirical patterns in current globalization—trade fragmentation, supply chain reconfiguration, digital expansion, and ESG pressures.
Theoretical framing: Applying Bourdieu’s capital, world-systems theory, and institutional isomorphism to interpret how these patterns affect and are shaped by international business strategies.
Synthesis: Building an integrated narrative that explains globalization today as simultaneous integration and fragmentation, shaped by unequal distribution of capital, hierarchical world-system structures, and institutional pressures for convergence.

The aim is theoretical generalization: offering a framework that can guide future empirical studies and assist practitioners in making sense of the complex global environment.

4. Analysis

4.1 Integration and Fragmentation: Two Faces of Contemporary Globalization

One of the main messages from recent economic assessments is that globalization now has two faces. On one side, cross-border flows of goods, services, capital, and data remain large and, in many cases, continue to grow. On the other, the rules and geography of these flows are changing under the influence of geopolitics and domestic policy.

International business strategies are being re-written around several tensions:

Efficiency vs resilience: Firms must decide how much redundancy to build into supply chains and how to balance cost minimization against protection from shocks.
Global scale vs regional depth: Companies consider whether to organize around global platforms or smaller, more integrated regional hubs.
Open markets vs national security: Governments increasingly screen foreign investment, restrict exports of sensitive technologies, and use sanctions or trade defenses, especially in strategic sectors.

The result is not a simple retreat from globalization but a partial re-wiring of it. Trade and data continue to cross borders, but more often within “trusted” networks, regional trade blocs, or under tighter controls.

4.2 Global Value Chains, De-Risking, and Friendshoring

Global value chains were central to the pre-pandemic wave of globalization. Firms located different stages of production in different countries, optimizing for cost, specialization, and market access. The pandemic, shipping disruptions, and geopolitical tensions revealed vulnerabilities in this model.

Recent studies and policy analyses show that firms and governments are now engaged in “de-risking” global value chains rather than outright decoupling. This includes:

Nearshoring and friendshoring: Relocating production closer to home markets or to politically aligned countries to reduce exposure to potential sanctions, export controls, or conflict zones.
Multi-sourcing and supplier diversification: Avoiding over-reliance on single suppliers or single countries, especially for critical inputs such as semiconductors, pharmaceuticals, and rare earth minerals.
Inventory and logistics adjustments: Moving away from strict “just-in-time” systems toward more “just-in-case” approaches with higher buffers and more flexible transport options.

From a world-systems perspective, these strategies may alter the location of manufacturing and assembly, benefiting some semi-periphery countries while potentially reducing opportunities for others in the periphery. Friendshoring may also create new cores and sub-cores within regions—such as key hubs in Asia, Eastern Europe, or Latin America—that host strategic industries for a subset of aligned economies.

Bourdieu’s notion of capital is also useful here. Countries and firms that possess strong economic capital (infrastructure, technology), cultural capital (skilled workforce), and symbolic capital (reputation as reliable partners) are better positioned to attract re-located investments. Social capital—embedded in long-term diplomatic and business relationships—shapes which countries are seen as “friends” in friendshoring strategies.

4.3 Digital Globalization and Cross-Border Data Flows

While physical supply chains face de-risking, digital globalization is accelerating. Cross-border data flows underpin cloud computing, digital trade, remote services, online education, and global platforms in e-commerce, social media, and software. Recent estimates show that the value of digital trade has grown rapidly in the first half of the 2020s, outpacing traditional trade growth.

However, data flows are also becoming a site of contestation:

Many countries have adopted or proposed data localization measures, requiring certain types of data to be stored domestically or restricting transfers abroad.
Geopolitical tensions increasingly influence digital policy, as governments scrutinize foreign digital platforms, apps, and cloud providers on security and competition grounds.
Different regulatory models—for example, comprehensive privacy frameworks in some jurisdictions and sector-specific or looser rules elsewhere—create patchwork conditions for international business.

From Bourdieu’s perspective, digitalization has given rise to new forms of digital capital: the skills, data assets, and algorithmic capabilities that can be converted into economic advantage. Recent scholarship shows how digital capital interacts with traditional forms of capital, shaping opportunities for individuals and organizations in the global economy.

World-systems theory suggests that digital globalization might reproduce core–periphery patterns, with core economies hosting most major digital platforms, high-value software development, and data-center infrastructure. Yet there is also room for semi-periphery regions to emerge as important digital service providers, back-office centers, or regional platform leaders.

Institutional isomorphism appears in the diffusion of global data protection standards and cyber-security frameworks. Firms operating in multiple jurisdictions often adopt the most stringent standards across their operations to simplify compliance and signal trustworthiness, even when local rules are weaker.

4.4 ESG, Legitimacy, and Convergence of Corporate Practices

Sustainability and ESG considerations have become central to globalization debates. International investors, rating agencies, and civil-society campaigns increasingly scrutinize how firms manage environmental impact, labor conditions, and governance structures across borders.

Recent studies show that multinational enterprises, particularly those operating in emerging markets, face strong institutional pressures to adopt ESG strategies and reporting practices as a way to respond to global expectations and secure financial, social, and environmental performance.

These pressures operate through:

Coercive mechanisms such as mandatory sustainability reporting directives, due-diligence laws on supply-chain human rights, and taxonomy regulations for green finance.
Mimetic mechanisms, where firms imitate ESG leaders or competitors to maintain legitimacy and investor access.
Normative mechanisms, including professional bodies, ESG rating methodologies, and global frameworks that shape what counts as “good” sustainability practice.

From a Bourdieusian angle, ESG performance can be seen as a form of symbolic capital, signaling responsible behavior and enhancing the reputation of firms and even countries. For example, emerging-market multinationals may adopt strong ESG disclosure precisely to overcome skepticism and project a credible global identity.

World-systems theory invites us to ask how ESG standards affect different parts of the global economy. There is a risk that stringent ESG requirements act as new barriers for smaller firms or poorer regions that lack the resources to implement and document compliance. On the other hand, ESG frameworks may provide tools for workers and communities in the periphery to demand better conditions from global buyers.

4.5 Inequality, Capital, and the Social Dimension of Globalization

Despite decades of globalization, inequalities within and between countries remain significant. Recent development reports warn that many developing economies, especially outside a few large emerging markets, risk experiencing a “lost decade” of slow growth and limited convergence with high-income economies.

Bourdieu’s theory helps explain why:

Households and firms with greater economic capital (resources, savings, credit access) can invest in internationalization, education, and digital tools.
Cultural capital such as language skills and formal qualifications determines who can participate in higher-value segments of global production.
Social capital—networks that connect individuals and organizations across borders—opens opportunities for migration, trade partnerships, and information flows.
Symbolic capital can cement advantages, as prestigious firms, universities, and countries attract disproportionate attention and investment.

World-systems theory emphasizes that these inequalities are not random but tied to structural positions in the global economy. For example, a country heavily dependent on commodity exports is more vulnerable to price swings and has less bargaining power in global negotiations than a country hosting major technology or financial firms.

Institutional isomorphism adds another layer: even when developing economies adopt “best practice” policies and corporate governance models, the starting distribution of capital and systemic constraints may limit how much they benefit from globalization. Simply copying institutions of core countries does not automatically replicate their outcomes.

5. Findings

The conceptual analysis of international business and globalization in the 2020s leads to several interconnected findings:

Globalization is being re-shaped, not reversed.Trade, investment, and especially digital flows remain strong, but their patterns are shifting. Regionalization, de-risking, and friendshoring represent a re-organization of global integration rather than its simple decline.
International business faces a dual challenge of integration and fragmentation.Multinational enterprises must integrate their operations across multiple markets while managing fragmented regulatory regimes, geopolitical risks, and divergent digital standards.
Bourdieu’s forms of capital illuminate who can adapt successfully.Firms and countries with strong combinations of economic, cultural, social, and symbolic capital are better positioned to attract investment, host re-located production, and participate in high-value digital activities.
World-systems structures still matter.Core, semi-periphery, and periphery positions influence exposure to shocks, bargaining power, and the ability to shape globalization’s rules. New patterns of friendshoring and regional hubs may modify but not eliminate these hierarchies.
Institutional isomorphism explains convergence in corporate practices.Despite geopolitical fragmentation, firms around the world increasingly adopt similar ESG, governance, and digital compliance frameworks, driven by regulatory, mimetic, and normative pressures.
Digital globalization introduces new forms of inequality and opportunity.Digital capital and cross-border data flows offer pathways for some firms and regions to leapfrog traditional stages of industrialization, but they also risk deepening divides between those with and without access to advanced digital infrastructures and skills.
Legitimacy and responsibility are now central to global strategy.Success in international business is no longer assessed solely by cost and market share; it also depends on perceived responsibility in environmental, social, and governance matters, and on the ability to maintain trust under conditions of uncertainty.

6. Conclusion

International business and globalization are entering a new phase. The earlier era, characterized by relatively stable rules, strong faith in trade liberalization, and extensive offshoring, has given way to a more complex environment where geopolitical rivalry, sustainability, digital regulation, and societal expectations all shape global strategies. Yet globalization has not ended. Instead, it is being re-negotiated and re-designed—geographically, institutionally, and digitally.

This article has argued that understanding this transformation requires more than economic indicators. Bourdieu’s theory of capital helps explain why some firms and countries have the capabilities to adapt and others struggle. World-systems theory reminds us that historical core–periphery structures still condition who gains and who loses from changes such as friendshoring or digital trade expansion. Institutional isomorphism sheds light on the paradox that, even as geopolitical blocs harden, corporate practices (especially around ESG and compliance) become more similar across the world.

For practitioners, the key implication is that international business strategy must integrate risk, resilience, and responsibility into its core logic. Decisions about where to invest, how to organize supply chains, and which digital platforms to use now have to consider political alignment, regulatory diversity, and sustainability impacts alongside traditional financial metrics.

For scholars and students, the evolving patterns of globalization offer rich opportunities for further research. Empirical studies can examine how different regions benefit from or are excluded by friendshoring, how digital capital is accumulated across the world-system, and how institutional pressures differ between core and periphery in shaping ESG and data governance practices.

In short, globalization today is best seen as globalization under tension: still connecting people, firms, and ideas across borders, but mediated by new forms of power, regulation, and responsibility. International business will continue to be a central actor in this evolving story, helping to determine whether the next phase of globalization becomes more inclusive and sustainable, or more fragmented and unequal.

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