International Business Essay

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In present time and age globalisation has gained much more importance then what it had about thirty years ago. No doubt globalisation started ever since human being existed on this planet, but it is observed that in this era geographical boundaries has a very little part to play, when it comes to trade, culture, travelling and communication. Effects of this integration of different economies will have its outcomes and many of them can be seen already. In most countries however due to Globalization one can see the growing concern regarding employment and income distribution (Lee & Vivarelli 2006, p.168). Based on qualative and quantative analysis this paper would come with the conclusion to suggest wether globalisation is beneficial for everybody or the complete opposite. Globalisation means increasing flows of trade, finance and factors of production across the border, with the help of faster transportation and effective communications set up. It is globalisation which is compeletly responsible for making this world a global village. With globalisation, international bonds develop not just amongst specific groups of countries but across a wide global network in which factors of production or finished goods can move freely. The second era of globalisation that we are now living has come as a outcome of a numerous factors, not only because of of internet (which has allowed the speedy flows of massive volumes of information) but also because of intense changes in institutional environments. The economic ideas of the 1970s promoted moves towards financial liberalisation and deregulation within a large number of OECD countries during the 1980s and 1990s, the policy approaches of the Bretton Woods institutions were also modified with the Washington Consensus being built upon the promotion of economic severity, privatisation and liberalisation Stiglitz and Gualerzi (cited in Baddeley 2006, p 392). Furthermore, Baddeley claims that this deregulation has made the movement of capital and factors of production across national boundaries, contributing to the globalisation process

In most countries, however, the current wave of "globalization" has been accompanied by increasing concern about its impact in terms of employment and income distribution (Lee & Vivarelli 2006). Evidence has been provided from group studies to explain that globalisation does promotes growth by Dreher (cited in Baddeley 2006, p 393). However, it has been argued that the benefits do not essentially help to alleviate poverty. Krugman and Venables( cited in (cited in Baddeley 2006, p 393) emphasize that globalisation has the potential to benefit less-developed nations but at the start globalisation will worsen world inequality but then it will reduce it down. For example—as transport costs fall below a threshold, developing nations suffer real income declines. Falling transport costs allow core nations to exploit greater economies of scale in manufacturing to the loss of manufacturing sectors in developing economies. Labour demand will fall in peripheral nations and rise in core nations as a consequence.

Milanovic (cited in Baddeley 2006, p.394) completely discards the view of globalisation as something that would benefit any economy, he also provides evidence that, since 1870, globalisation has worsen international inequality with particularly prominent increases in inequality during the 1978–1998 globalisation era. He argues that the blow on less developed countries have been severe which means per capita GDP has not increased in Africa and a number of less developed countries are in a financial crisis and many transition economies are facing extraordinary levels of debt.

The point worth mentioning here is that globalisation has increased the level of business activity all around the world but to be honest for many developing countries this is of very little use rather it is to the their detriment. Now when the host country provides...
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