The paper "Globalization Effects " is a great example of business coursework. Globalization refers to the increase in global linkages resulting from international trade (Boudreaux, Donald J., 2007). It must be noted the globalization is different from financial integration, but the two are closely related. This is because economic integration refers to the linkages of individual countries to the international capital market. Therefore, an increase in globalization is resulting in increasing economic integration. Over the years, globalization has increased in both developed and developing countries. However, the developing countries are the ones who have felt the greatest impact (Peter.
G. Warr, 1997). Globalization has had both positive and adverse effects. The positive impacts include: 1. Access to finance With globalization, foreign lending has increased due to the increase in interaction between people from different countries. This is imperative especially for developing countries that are usually faced with the problem of lack of capital for investments. It has therefore encouraged entrepreneurial activities in many developing countries. By availing funds to developing countries, globalization has enabled their governments to take loans to develop the infrastructure in the country.
This has resulted in the provision of better services to the people and an improved living standard. 2. Access to New Markets Globalization is characterized by the idea of opening up markets. This is also referred to as trade liberalization. Trade liberalization has enabled many developing countries to access a wider market than they would if they stuck to their local markets. This can be attributed to the fact that globalization has broken down many trade barriers. As a result of wider markets, the local industries have grown and expanded therefore generating more revenue to their owners and employment opportunities for the country. 3.
The decrease in Unemployment Rates Due to globalization that is often characterized by trade liberalization, many foreign companies have set up branches in developing countries. This has resulted in the creation of greater employment opportunities and a reduction in overall unemployment rates in those countries. This contributes to batter living standard of the people and a general reduction in poverty levels. 4. Improved technology Globalization has enabled many developing countries to access new technology. This has led to increased mechanization in various industries that have resulted in cheaper products that are able to compete with foreign goods in the market. 5.
Growth of local businesses Globalization has led to the establishment and growth of local firms in developing countries. Due to increased capital inflows, wider markets, and reduced trade barriers, businesses have gone ahead and attained the status of multination. 6. Wealth creation Globalization has enabled entrepreneurs involved in international trade to amass the wealth that they would have otherwise lacked access to. This has enabled them to live better lives, create employment opportunities for others and contribute to the development of the country by paying more taxes. 7.
Improved Standards of living Due to the ideal of trade liberalization embraced by globalization the standards of living of many people has been improved. This is due to increased capital inflows and employment opportunities. Their purchasing power is therefore enhanced enabling them to buy more.
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