Consequences of Globalization in Economics
The term globalization can broadly be defined as a process through which global networking of communication, trade, and transport leads to integration of regional economies and cultural societies. The process is a result of a combination of factors like culture, technology, politics, and economics. Economic globalization refers to “the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology” (Bhagwati 5). This essay discusses the positive and negative effects of globalization in different economies.
The process of globalization has various positive impacts in both developed and developing economies. Industrially, globalization has led to the creation of a global market that has made it easier to access different products from different economies. Goods and services can now be traded across national boundaries with ease. This has led to a significant growth in industrialization resulting in creation of employment, increase in GDP, and improved living standards globally. In the financial sector, globalization has led to the integration of financial markets that have led to improvements in the provision of financial services among different countries. For example, external financial borrowing has greatly improved. Rapid development in countries like Japan and Malaysia has been as a result of external financial borrowing.
Globalization has been a result of increased flow of communication between remote geographic regions. This has been made possible by technological advancements in satellites, fibre-optic communications, telephone, and specifically the internet. Advancements in communication have significantly improved trading and other business activities. For example one can easily buy products and make shipments via the internet.
Globalization has also had negative effects in different economies...
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