Economic – Make profit is the main objective of a company. This is because on a business mind set they want to gain more profit in other countries compare to local business. FEATURES 1. Benefits to participating countries – International business open up the economic to participating countries. For example, they can gets more foreign capital, technology and more job opportunity.
After the introduction of the trade liberalisation policies in the developing countries across the globe issues of international trade and economic growth have gained much importance. The act of buying and selling goods and services is called trade. Trade exists between countries. Industrialisation, globalisation, increase in growth of multinational companies etc., all lead to need of trade between countries. This is referred to as International trade.
From the diagram we can see South Africa’s economic growth speed is so slow. A we know it is a developing country, it GDP is $350 billion which ranks 33rd in the world. At year 1996, the south Africa government made the plan: GEAR, that include promoting privatization; reduce deficit; increase export and encourage the development of small or medium business company. For these policies, it help more people found jobs and change them living standard, that can increase economic growth. At 2008 financial crisis, the government use the money policy and supply side policy, by reduce interest rate to stimulate aggregate demand, and reduce tax, it can stimulate the person spending and investment, it lead to the economic growth and increase GDP.
The truth, that the openness of trade is positively, linked to economic growth of the countries, has helped the trade liberalization and openness to be a necessary part of the developing countries policy measures. By trade openness, it means that the reduction or complete removal of trade barriers and this idea has become very important in the policy making for both the developed and developing economies. There are so many different forms of trade like the transfer of technology, education flow and ideas sharing other than the trade in terms of only commodities. The restrictive trade policies and measures were followed by the developing countries in the start but now they have moved towards the liberalization of trade practices as the world has moved towards globalization. There is a strong support given in the literature of the idea that trade openness acts as an engine of the economic growth and the existing literature supports the positive relation between the different economic variables.
Countries like Nigeria, Columbia, and Indonesia are prime examples, where these financial institutions, invested in organizations responsible for environmental degracion and destruction. Source URL: http://ifsw.org/policies/globalisation-and-the-environment/ Some advantages in the global era Globalization is driven through ideas and innovation, which leads to new technologies being created and this in return stimulates employment growth, causing economic expansion?n resulting in a more substantial standard of living in the process. The lowering of import tariffs and the destruction of borders, will contribute to work creatively, permitting people to move more freely between nations, and provides smaller companies to expand their brand as well as products into the global market. Another result of bilateral trade, is more cost effective resources and materials, that could be accessed together with an inexpensive yet educated workforce. A clear example of this might be when China opened its market to the rest of the world in 1990?s, allowing for countries such as the United States and Europe to consider
Other than that, global trade allows wealthy countries to use their resources—whether labor, technology or capital— more efficiently. Because countries are endowed with different assets and natural resources (land, labor, capital and technology), some countries may produce the same good more efficiently and therefore sell it more cheaply than other countries. If a country cannot efficiently produce an item, it can obtain the item by trading with another country that can. This is known as specialization in international trade. However, international trade not only results in increased efficiency but also allows countries to participate in a global economy, encouraging
Background of the Study The need to improve the economy standard has become the target of most government in the developing economies/countries of the world. Over the years, Nigeria government has adopted a number of measures aimed at accelerating the country’s economic growth and development. The need to improve the living standard of its citizenry, reduce unemployment, increase capacity utilization which leads to increased productivity has led to the introduction of economic policies in Nigeria and other developing countries of the world. Foreign trade has been a highly debatable construct that has been severally predicted to carry the potency of increasing the nation’s economy. The word “trade” has been defined in the Oxford Advanced Learner dictionary as “the activity in which people buy and sell or exchange goods and services” (Kumar, 2009).
The share of agriculture industry in Tanzania economy is low, accounting for around 20 per cent and its share is declining. Mining industry is becoming a major contributing sector in Tanzanian economy. Tanzania share to world output has never reached 0.1% for about 40 years to date; it has generally declining. Foreign trade accounts for significant share of Tanzania GDP; it accounts for at least 60 per cent of GDP. Imports accounts for higher share of foreign trade leading to consistent trade deficit in Tanzania.
CHAPTER 1 Introduction 1.1 Background Of Study: Trade is the engine of economic growth and development, the trade liberalization or international trade the important part of a growth and gain more profit. Trade of the countries is the main source of improvement in the process of industrialization and moreover advancement of modern technologies it brings the development experience in trade structure on the basis of enough comparative advantage Hultman (1967). An empirical analysis by Adenikinju and Olefin (2000) showed that international trade and policies can improve the industrial sector and their growth also improves the domestic market and domestic industrial sector. The international trade improves the modern technology
Government subsidies boost some industries by increasing the demand and supply of the goods and services of those industries. Also, the government subsidies correct externalities by encouraging consumption of merit goods and services and encouraging companies with negative externalities to adopt production processes with positive externalities. Additionally, subsidies regulate monopoly of power by strengthening start-ups and business growth thereby creating competition. Government Intervention; Subsidies In the free market, the price mechanisms determine the allocation of resources and spending and preferences of the consumers and supply decisions of businesses intersect thereby determining the equilibrium prices. Since of the price, mechanisms determine resource allocation, inefficiency arises.