How affects the economy and the trade of the states?|
Globalization has changed us into a company that searches the world, not just to sell or to source, but to find intellectual capital - the world's best talents and greatest ideas. Jack Welch
Table of Contents
What does globalization mean?3
Effects of Globalization6
How globalization affect the economy?9
Reduced Child Labor10
The Negative Effects of Globalization on Companies.11
Decrease in wages11
Export of Financial Capital12
HOW GLOBALIZATION EFFECT THE TRADE…14
BENEFITS OF FREE TRADE16
GLOBAL TRADE EXCHANGE16
The world is becoming more and more interconnected. Globalization changes how people consume, work and live almost everywhere of the world. Today, many economic, political, cultural or ecological relationships are not explainable from a national perspective. At the same time, a controversial debate about the consequences of globalization has begun. But what are the main causes for globalization? In what areas it is most prominent? And who are the winners and looser of globalization? How it affects in the economy and the trade of states? The advantages and the disadvantages? All the answers of these questions you will find in this project. But firstly we will show you a video that speaks about globalization .It is really an interesting video that has some important information about globalization and how it affects in economy, culture and politics. http://www.youtube.com/watch?v=3oTLyPPrZE4
What does globalization mean?
Globalization is the system of interaction among the countries of the world in order to develop the global economy. Globalization refers to the integration of economics and societies all over the world. It involves technological, economic, political, and cultural exchanges made possible largely by advances in communication, transportation, and infrastructure.
Many people think that this world has no borders because we are so connected, but others complain that globalization is making the rich richer and the poor poorer. As far as the consumer is concerned, he can get what he wants in any country and as far as a company is concerned, it can get customers throughout the world. Wealthy companies seek the cheapest labor in any part of the world, to drive down the cost of production and increasing profits.
When used in an economic context, it refers to realization of a global common market, based on the freedom of exchange of goods and capital when used in an industrial context, it refers to emergence of worldwide production markets and broader access to a range of foreign products for consumers and companies. When used in a financial context, it refers to emergence of worldwide financial markets and better access to external financing for borrowers. When used in a political context, it refers to the creation of a world government which regulates the relationships among governments and guarantees the rights arising from social and economic globalization. There are two types of integration—negative and positive. Negative integration is the breaking down of trade barriers or protective barriers such as tariffs and quotas. In the previous chapter, trade protectionism and its policies were discussed. You must remember that the removal of barriers can be beneficial for a country if it allows for products that are important or essential to the economy. For example, by eliminating barriers, the costs of imported raw materials will go down and the supply will increase, making it cheaper to produce the final products for export (like electronics, car parts, and clothes). Globalization in the context of business strategy has...