Modernization theory assumes that all countries could follow the same path to development and that the kind development that industrialized Western countries have is desirable (Little et al., 2014). Despite its Eurocentric nature, the modernization theory offers some objective measures regarding the benefits of following a development pathway, such as better standards of living and improved life expectancy (Little et al., 2014). Dependency theory, on the other hand, assumes that low-income countries are passively letting themselves exploited (Little et al., 2014). The rise of the garment industry in Bangladesh after the initial Daewoo investment illustrates that economic imperialism has many unintended consequences; knowledge leaks and spillover effects mean that the hinterland may kickstart its own economic growth using the knowledge, skills, and assets provided by the metropolis (Easterly, 2002). However, it provides important insights regarding power relationships between countries as they engage in trade.
Protectionism is coming to us from all directions, and numerous nations are using both direct and indirect barriers to trade, as when they require to do so. What economists mostly talk about are the threats of protectionism, rather than its benefits and how protectionism isn’t a long term solution. By now we have understood that protectionism, whether we like it or not, is used in certain economic situation by every other country, but it shouldn’t be seen as a permanent solution. Protectionism is a superficially convincing concept, because we can immediately point out the number of jobs saved, lesser no of imports etc. but it slightly more difficult to see the benefits of free trade in numbers, but one country’s protectionist policies will not just hurt their trading countries exports.
While doing so, this paper pointed out why calls for protectionism are greater during sharp economic contractions. It then tried to explain why the increase in protectionist measure even during the sharp contraction of 2008-2009 was fairly modest. This paper then finally concluded by providing insights on why international trade/ business is essential for the development and prosperity of a country. References Bonciu, F., & Ghibutiu, A. (2011).
Social globalization describes an exchange of values, ideas and it has facilitated the promotion of equality, dignity and human rights. Finally, the major effect of globalization is produced in the world economy. The aim of globalization is the growth of the global economy by giving firms a superior competitive position with lower cost through free trade and by increasing the number of consumers, products and services. Some people said it helps developing nation-states to “catch up” the industrialized ones and it improves the overall standard of living. Nonetheless, there is a risk for smaller companies that cannot compete in an international market and world governments should promote international investments and try to eliminate barriers to trade even if it causes them some
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.
The level of international involvement is associated with the cost efficiency on the supply-side. Lu and Beamish (2001) examine the effects of internationalization between SMEs and firm performance and found positive impact when company expands business by doing FDI’s. Furthermore, when companies make an alliance with a local partner to absorb local knowledge, companies will gain degenerate deficiency of lacking resource and capabilities. The other results of the relationship are an inverted U-curve and S-shaped relationship. Hitt, Hoskisson and Ireland (1997) find an inverted U-curve relationship between International diversification, which are demographic and product, and firm performance.
It also places certain people within the spectra of the economy. This is because politics has the ability to define who has the economic resources. We note that in the global context as well, there are consequences of unequal distribution of resources. An unequal resource distribution may lead to a political unrest and according to Acemoglu and Robinson (2006), “economic institutions are endogenous”. This means that some individuals will be given more benefits than others in economic resources which may end up in a total decline in economic growth.
Also, people who work now in a big international business one of the days they will have their own small business and will give another generation the opportunity to have a job which will increase economies, so we should focus on how to enhance globalization by increasing generation’s knowledge about it. Although education system will give everyone the opportunity to learn from different kinds of teachers who are professional because each country has different stages of education system but the same materials, and this is what globalization will case to the education systems which will be a so strong