Globalization and Capital Market Volatility: Implications for National Policy and Multinational Corporations

Abstract

The capital market plays a strategic role in the global economic system by providing financing access to both public and private sectors, as well as serving as a key indicator of national economic health. Economic globalization has accelerated the integration of international financial markets, enabling cross-border capital mobility that enhances the efficiency of resource allocation while simultaneously increasing the risk of market volatility and systemic instability. This study aims to analyze the relationship between economic globalization, capital market volatility, national policy, and the role of Multinational Corporations. Employing a library research approach, the study reviews scholarly literature addressing the effects of globalization on financial stability and capital market dynamics. The findings indicate that, although global financial integration increases investment opportunities and fosters economic growth, macroeconomic dependence at the global level amplifies the risk of crisis contagion. Consequently, adaptive national policies and robust market governance are essential for maintaining long-term economic stability. These results highlight the importance of balancing financial openness with regulatory oversight to mitigate systemic risk while promoting sustainable economic development.