The major advantage of globalization in the context of economy and businesses are firstly cheaper production costs and secondly more consumers or a wider market. Let’s discuss cheaper production costs first, big and even small businesses go to popular destinations like China, India, Brazil, Mexico and eastern European countries. Increased profit is a direct result of lower production costs. This helps businesses gain competitive edge over their counterparts. Secondly, more consumers are available when a business sells its products or services worldwide; this again leads to higher profits.
This means that, at regional level, there is a wider application of the principle of comparative advantage. Market access; easier access to each others markets means that trade between members is likely to increase. Trade creation exists when free trade enables high cost domestic producers to be replaced by lower cost, and more efficient imports. Because low cost imports lead to lower priced imports, there is a consumption effect; which increased demand resulting from lower prices. Economies of scale; producers can benefit from the application of scale of economies which will lead to lower costs and lower prices for consumers.
This kind of subsidy is utilized to guarantee satisfactory domestic supply by supporting indigenous fuel generation with a specific end goal to diminish import reliance, or supporting abroad exercises of national energy organizations. Doing this helps to keep monetary profits and other benefits inside the lines of the United States. As related to economic benefits, energy subsidies show up as diminished costs. They are utilized to invigorate specific monetary divisions or fragments of the populace. For example, this can directly impact the community by mitigating destitution and expanding access to energy in cultivating nations.
If the market access conditions have increase and been influenced by bilateral trade agreements. Trade agreements provide trading partners with lower tariffs. But it have made it harder for developing countries to take full advantage of poverty reduction and rapid growth since the government of particular country will apply different level of tariff rate to similar product depending on their origin. For exporter, markets access not only the disadvantages that the exporter faces to domestic producers and also on the relative pros and cons that it has compared to competitors from other countries (Fugazza & McLaren,
Globalization has brought cross-border flows of goods and capital and stronger nationalism and so on. From material form ,globalization refers to the cross-border flow of goods and capital ,through the development stage of translation ,local internationalization and globalization. we can not predict the globalization of national income and loss. It is difficult to have benefits or damages in globalization .Great power ,weak countries ,big countries and small countries can all benefit or suffer. The traditional China was defeated by globalization, but it also emerged from globalization.
' The integration of the workforce in developing countries into global system of production is already raising living standards, improving working conditions and creating more jobs in those countries. ' '(Samuel J. Palmisano,2006:133) Another advantage, from businesses perspective, is that companies have now access to larger markets and therefore to can sell their products to other countries. That means more chances to make profit and win a place in the global market. Furthermore, enterprises have the opportunity through globalization to search for sources with cheap raw material, which leads to cheaper labor. This is also called also outsourcing, and is the most common step for many companies.
The developing countries have achieved this progress by reforming their policies, institutions, and infrastructure. The existing market structure, the market potential and the expected increasing returns are the leading criteria for firms for investment. With the growing global competition, the world economy provides a large source of supply and demand, so that international trade increases the possibilities for an adequate through specialization and complementary strategies. Economies of location can be seen as a prominent factor in globalization of industries. The transnational co-operations (TNC) are important market players in world trading system.
The important one is that international trade could have impact on home industries. If imports unrestricted it would lead the upcoming industries to collapse. Another disadvantage, developing countries could exploit the underdeveloped countries because the underdeveloped countries would economically depend on it. Protectionism policy / Restricting trade Free trade involves costs as well as benefits. Every country implements some barriers for trade.
Increased free trade and communication between nations, along with increased access to technology, media, education, healthcare, consumer goods, and other resources are often considered advantages of globalization. Some disadvantages of globalization include exploitation of developing countries, cultural homogenization, and adverse effects on local economies and the environment. Globalization is a complex
Known as “export-import”, this kind of activity brings a lot of benefits of the countries that are getting involved such as access to technology, health, and education. Developing countries can actually follow this method to improve their countries. Thus, “developing countries should be more globalized by doing export and import activity due to access to technology, health, and education”. As mentioned above, technology is one of the perks a developing country