Globalization and Regionalization
International business transactions are starting to become more prevalent and ever easier to conduct due to advancement in information technology and improving inter-country relations. Globalization and its lead in stepping stone regionalization are paving the way for increased free trade agreements and comparative advantages in various goods between different countries and nations. The addition of the World Bank and the World Trade Organization (WTO) as tools in financial assistance and implementation of policies to in-need and involved trading countries aids that existing framework for global economic success.
Globalization is the “process of interaction and integration among the people, companies and governments of different nations” (Levin Institute, 2010). International trade of goods and international investing both illustrate the concept and provide an outlet for comparative advantage through free trade of those goods. With countries producing what they are able to most efficiently (could be multiple countries producing the same good to utilize available resources) and trading with other countries for different goods, free trade emerges and globalization is promoted. Productivity and innovation for any good that is globally manufactured and traded tends to increase, and prices are held relatively constant, allowing all involved greater profits and a better quality of life (Ligi, 2008). Governments can get involved to suppress or even derail the free trade attempts with specific trade barriers, taxes or embargos. Political agendas and small native businesses are usually the causal reasons for those restrictions. Small businesses that do not have the opportunity, adequate capital or appropriate networking ability to advance beyond their own country’s borders can fall victim to the dark side of globalization and fail. Attempted prevention of that exact result could be accomplished with simple regionalization....
Please join StudyMode to read the full document