- Globalization in Economics and Its Consequences
- Economic globalization is the advancement that takes place in the international trade. Economic globalization has come into effect due to the reduction of various barriers in the international trade. Things that hinder globalization include high taxes and large amount of export fees. The theme of globalization is that the world’s market can function in a beneficial way to all countries. The main goal of economic globalization is to increase wealth in the developing countries. Investments among foreign countries take place because of economic globalization. Economic globalization employs the ability of countries to exchange goods without difficulties. Economic globalization result to the carrying out of trade activities without employing marketing borders (Dreher, Gaston & Martens, 2008).
- There are two categories of economic globalization and the first one being the globalization of consumption. In this type of economic globalization, the country that produces a certain commodity becomes fully independent of the consumer of its product. Globalization of consumption promotes the activities of international trade (Dreher et al., 2008). In this type of globalization, people have the advantage of accessing various commodities. The consumption of the commodities does not depend on the similarity of various practices between countries. Consumption patterns of economic globalization favor the countries in the world market equally. Through the globalization, communication technology is booming in the marketing sector (Dreher et al., 2008).
- The other type of economic globalization is production and ownership. In this type of economic globalization, trade takes place in manner that the nationality of producer is independent of the nation that houses the products. Production in globalization allows direct investment among different countries to take place. This type of globalization makes countries to specialize in activities of producing better outcomes. Economic globalization provides the ability of companies to get profits of an integrated global economy. This type of economic globalization leads to technological differences. Through this type of economic globalization, there are different endowment factors among countries (Martell, 2010).
- Economic globalization helps in promoting the production of resources in the global market configuration. Economic globalization makes sure that the product flow in the global market is in control. Through the economic globalization, improvements of technology in the global market are possible. Another positive view of economic globalization is that the world trade grows in proportion of the output. Through the economic globalization, direct investment is increasing among the developing countries. The economic globalization has contributed to the indirect competition among workers in the global job market. This is an advantage to the employees because the fate of national economies will no longer hold their fate. The advantage of economic globalization is that countries engage in international trade even when one country has high outcomes in all sectors (Martell, 2010).
- Economic globalization largely affects the salary distribution of workers. Wages of workers fail to depend on the results of individual economies. Economic globalization has a disadvantage of raising unemployment. Through the economic globalization, job shifts to the developing countries where companies provide low wages to the workers (Baldwin & Winters, 2007). The economic globalization result to the increase in work given to children. Children get the opportunity to work in various firms in order to increase the export products. Direct investments among different countries, which are, a result of economic globalization promote companies that pollute environment to the work in poor countries. This means that economic globalization has many disadvantages to the environment (Baldwin & Winters, 2007).
- References
- Baldwin, R. E. & Winters, L. A. (2007). Challenges to Globalization: Analyzing the Economics. New York: University of Chicago Press.
- Dreher, A., Gaston, N. & Martens, P. (2008). Measuring Globalization: Gauging Its Consequences. New York: Springer.
- Martell, L. (2010). The Sociology of Globalization. New York: Polity.
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