Economic globalization is an increasing economic integration and local economies across the globe in regard to not only commodities and services, but of knowledge and expertise. Economic globalization for many years have been expanding since the emergency of the trans-national trade giving developing countries the opportunities to cut down trade barriers. The economic globalization has a huge impact for developing countries by creating new opportunities to attract foreign investors as well as, expanding overseas markets. Economic globalization also increase standard of living by giving governments of developing nations access to foreign lending. In summary, this research paper will discuss on the effects of economic globalization for developing countries.
Economic globalization impact the developing countries by accelerating the process of industrialization through use of advanced foreign technology as well as getting more suitable raw materials from other countries. Advanced technology has considerably made the expenditure on communication and transportation low, which has in turn made economic globalization feasible. For instance the price of computers in 1990 was 40% and in 1998, the price level had reduced to 80% (Huidumac-Petrescu & Joia, 2013). This category of space and time compression consequence of technology development to a great extent decreased the cost of making investments and carrying out international trade, thus making it feasible to synchronize universal production. For example, if technological advancement as well as, IT developments were understood to be the technological motivating forces that enhanced economic globalization, then market focused transformation that is often carried out all over the globe should be observed as an institutional motivating factor for this inclination. Under the support of WHO, many developing countries have increasingly cut down their tariff as well as, non-tariff barriers as a result, the growth of trade in addition to investment have been greatly stimulated. In addition, economic globalization permit free exchange and transfer of new and innovative communication technological development around the world. On the other hand, the use of internets and mobile phones have presented people with more chances and openings to commune in groupings, along with getting latest news and information across the world fast.
Economic globalization impact the developing countries by attracting foreign investment; for instance, for mutual benefit, by promoting local economy as well as, increasing employment opportunities. Globalization has connected the entire world resulting to an increase in trade of goods and services across borders (Swamy, 2014). The investors on the other hand are growing more and more escalating competition for investments. Globalization brings in growth to nations where nations tend to facilitate growth of economies especially through importation of goods and services by eliminating trade barricades such as restrictions on foreign ownership, taxes and trade controls. These create opportunities for promoting trades and attracting investments. Therefore, the increase in investments and trades under globalization can be significant in driving economic growth and creating jobs hence increasing employment opportunities (Swamy, 2014). Research shows that through economic globalization, developing nations have created strategic groupings to take part in international chains to offer and look for opportunities; thus, improving the quality and standard of living and significant enhancement economic productivity (Kunnanatt, 2013).
Economic globalization also influences developing countries by expanding overseas markets. For instance, economic assimilation seems to lower national barriers to investment allowing goods and services to move freely all over the world exposing business to competition and new technology. It is evident that less competitive businesses tend to be unsuccessful and exit the marketplace and so, in order carry on with business, organizations will need to sustain their business competitiveness (Asongu, 2012). Therefore, open structured economies create incentive for business to become more cost-efficient in order to keep on being competitive. Economic globalization leads to freer trade between different countries, hence promoting communication and cooperation with oversees. Research shows that this has been one of its largest benefits especially to developing nations. For instance, homegrown industries are able to see trade barriers fall as well as, having access to a much wider international market. Economic globalization also expand the overseas markets by promoting communication and cooperation with oversees. For instance, because of advanced communication systems such as media, international ideas as well as, values are easily conveyed crosswise nation states and mounting a new-fangled universal culture that helps to encourage innovative economic ideas and movements (Huidumac-Petrescu & Joia, 2013). Economic globalization expand overseas markets through sustainable development of products such as firms become inclined to be more proficient facilitating for manufacturing/production overheads to be kept low (Alexander, 2013) As a result, consumers gain from reduced cost of living which often leads to improved real revenue among citizens. Conversely, as most developing nations take part in intercontinental trades, they often modify their production model to commodities and services in which they possess comparative advantages. Because of these, consumers will stand to profit from the large basket of commodities and services that are accessible at an affordable cost.
One possible consequence of economic globalization is expanding the foreign overseas markets. As a result of increased economic associations among countries, every nation involved tend to realize a better welfare; consequently, each develops interest in enhancing the prolongation of their interconnection partners. In addition, given that war uprising would definitely lead to a breakage of partners jointly beneficial profitable contacts, they will all have an motivation not to allow or authorize diplomatic divergences to escalate to conflicts within the militaries. To sum up, as countries economic interdependence increases, each state’s motivation to resolve conflicts among each other enlarges, and as a result there will be a lesser risk of war as the world may continue to experience intensified economic globalization.
In conclusion, economic integration plays a key role in shaping present-day world, as it is affects the way businesses are conducted as well as how one country communicates with another country when trading. Economic globalization impacts developing countries by altering the society structures while fostering new prospects for development. It also makes autocracy more expensive and less likely for a nation in the modern world; however, it also produces tougher restrictions on the self-sufficiency of these nationwide societies, which choose to play a part in the international economy. Globalization may destabilize a nations self-government and sovereignty in regards to economic terms. Further, social advocates on the other hand argue that economic globalization has provided developing countries with opportunities to focus global attention and issues that may arise from globalization itself, such as costs with benefits of globalization to the worlds’ underdeveloped countries.
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