Modern world is ever evolving, and so is its economy. Economic globalization is the system in which productions and markets in diverse countries are increasingly becoming interdependent because of the dynamic trade of goods and services and the flow of capital and technology (European Commission, 1997). Economic globalization causes many consequences throughout the world. Some may earn substantial benefits, while some may suffer from negative effects. Nonetheless, many evidences suggest that economic globalization benefits the majority of global citizen.
It will undoubtedly play a decisive role in the global economy in the XXI., Giving a powerful impetus to the development of a new system of international economic and political relations. Globalization caused by objective factors of world development, the deepening of the international division of labor, scientific and technical progress in the field of transport and communications, which reduces the so-called economic distance between countries. Approximately 1/5 of the income of the industrialized countries and the developing countries 1/3 directly dependent on exports. An estimated 40-45% of the world engaged in manufacturing and about 10-12% in the services directly or indirectly related to foreign trade, which remains the principal means of redistribution of global income. Allowing to obtain the necessary information from anywhere in real time and make decisions quickly, modern telecommunication systems is unprecedented facilitate the organization of international capital investment, co-production and marketing.
And also, as a result of international trade, the market contains greater competition with more competitive price and cheaper products. This essay will focus on the definition, advantages and consequences of international trade with considerable theories and evidence. First point I want to emphasize is that international trade is the exchange of goods and services between countries. This is the type of world economy and trade, prices, supply and demand, impact which influences world events. Political change in Asia is inclined to lead to increase labor costs, thus increase the production costs of sneaker companies.
Globalization refers to the cross-border flow of goods and capitals going through the stages of internationalization, partial internationalization and globalization. The internal flow of goods and capital is the uppermost modality of globalization, accompanied by the according locality, international economic management organizations and economy entities as well as international exchanges, collision, conflict and integration of cultures, lifestyles, values and ideologies. (Weng, 2006). Globalization increases economic growth and generates a wider range of products and services. The rise of globalization has created interdependent markets that highlight the pros and cons of leveraging foreign exchange.
Globalization The growing economic interdependence of countries worldwide through increasing volume and variety of cross border transactions in goods and services and of international capital flows, and also through the more rapid and widespread diffusion of technology. International Monetary Fund Globalization today is an inexorable reality and is being built into the process of economic reforms in almost all the nations of the world. It is the process of international integration of products, technologies, human resources, capital, cultures and information. It refers to the increasing integration of economies around the world particularly through trade and financial flows. As such, it is characterized by increasing social and economic openness and growing interdependence between the countries of the world.
For this reason, disparity in terms of economy increases dramatically just as people who live in underdeveloped countries have many opportunities, just like finding easily workplaces, to live a superior life unlikely people who live in the U.S. lose their workplaces. In the perspective, globalization allows companies and businesses of the U.S. to gain far better earnings; however, this allowance is number one cause of economic inequality. This case leads gap between rich and poor to increase
In fact, many of the features of the current wave of globalization are similar to those prevailing before the outbreak of the First World War in 1914. There are some advantage and disadvantage in globalization. The advantage of globalization are resources of different countries are used for producing goods and services they are able to do most efficiently, consumers to get much wider variety of products to choose from, consumers get the product they want at more competitive prices, and companies are able to procure input goods and services required at most competitive prices. And the disadvantage of globalization are developed countries can stifle development of undeveloped and under-developed countries, economic depression in one country can trigger adverse reaction across the globe and it can increase spread of communicable diseases. However, there are few barriers in globalization causing activity or process becomes
For some it means globalisation is gradual integration of economics and societies which is driven by technologies, new economic relationship and the national policies of wide range of actors, including governments, international organisation, business, labour and civil society. For some it means increased international trade and technological advance. Other meaning of globalisation is that growing economic integration at international level based on the activities of Multinational Corporation. And these activities involve financial exchanges, evolving production strategies, marketing rights and responsibility across boundaries of the nation state. Robertson (1992: 8) says that globalisation is understood as process that transform heterogeneous world into a compressed but not homogeneous, at the same time it intensifies consciousness of the world as a whole.
• Disparity Though globalization has opened new avenues like wider markets and employment, there still exist a disparity in the development of the economies. Structural unemployment crops up as a result of this disparity. Developed countries are moving their factories to foreign countries where labor is cheaply available. The host country generates lesser revenues, and a major share of the profits fall into the hands of the foreign
As a result, this has led to a dependence of other states from the United States in science and technology; thus, it forms the basis for the formulation of foreign policies of the state. Thus, the globalization has the potential of bringing certain vital changes in the economic environment through the creation of connections between economies because, in a globalized world, the economies are interdependent and can interact and benefit one another. A substantial contribution to the country’s economic progress has been realized via the process of globalization that was initiated by various