Effects Of Globalization Influence On Global Trade

1382 Words6 Pages
GLOBALIZATION DRIVERS WHICH INFLUENCE INTERNATIONAL TRADE

GLOBALIZATION

• Globalization is a process of interaction and integration between people, organizations and governments of different nations driven by international trade and investment aided by information technology generating interdependence of economic and cultural activities. This process has effects on the environment, culture, political systems, economic development and prosperity not forgetting the societies well being around the globe.
• For many years, people and organizations have been buying from and selling to each other across borders, for example the Silk Road across Central Asia that connected China and Europe during the Middle Ages.
…show more content…
Characteristics of globalization
• The geographic dispersion of industrial and service activities, for example research and development, sourcing of inputs, production and distribution, and the cross-border networking of companies i.e. through joint ventures and the sharing of assets is the process of deeper economic integration between countries and regions of the world.
• Globalization no longer necessarily requires a business to own or have a physical presence in terms of either owning production plants or land in other countries, or even exports and imports. Many businesses use licensing and franchising to help expand their overseas operations. The following are characteristics of globalization:
 There’s greater trade in goods and services, both between nations and within regions.
 There is an increase in transfers of capital including the expansion of foreign direct investment (FDI) by trans-national companies (TNCs) and the rising influence of sovereign wealth
…show more content…
Some communication and trade took place between distant civilizations even in ancient times. Global economic integration took place through trade, factor movements, and communication of economically useful knowledge and technology proving to be on a generally rising trend.

• This process of globalization in the economic domain has not always proceeded smoothly neither has it always benefited all whom it has affected. Despite there being occasional interruptions, such as following the collapse of the Roman Empire or during the interwar period in this 21st century, the degree of economic integration among different societies around the world has generally been on the rise.
• Indeed, during the past half century, the pace of economic globalization has been particularly rapid. With the exception of human migration, global economic integration today is greater than it ever has been and is likely to soar in the future.
• Fundamental factors have affected the process of economic globalization and are likely to continue driving it in the
Open Document