The paper "Impacts of Globalization on Developing Countries" is a great example of a micro and macroeconomic essay. Globalization has been increasing substantially over the past years and is assessed to be creating several opportunities for both developed economies and more so developing countries. The largest impact however has been found to be on developing countries that are now able to attract significant amounts of foreign investments and trade opportunities that have led to economic growth and development. Globalization, even in the developing countries where it is desired, has led to both positive and as many negative impacts almost in equal measure and it is the particular kind of impacts (positive and negative) that have been the subject of many debates concerning the issue of globalization.
Globalization leads to economic growth and development through various channels such as cross border information flows, technological transfers, capital transfer from industrialized to developing economies, widening of markets for domestic products, improvements in human capital. Over and above this, globalization also leads to direct economic growth (Zhang, 2001). There are also negative effects of globalization majorly identified as influencing income distribution, employment, environment and even economic growth (Dollar & Kraay, 2001).
Income inequality is one of the most fronted adverse externalities of globalization and that as the nature of globalization keeps changing, so does the channels through which the distribution of resources is affected (Goldberg & Pavcnik, 2007). But it is the validity of these premises that are questioned since in as much as there are countries in which globalization has led to inequality like is the case In China, there is no worldwide trend (Dollar, 2003).
Most arguments against globalization also seem to be based on genuine concerns, there are fears of erosion of social and environmental standards, high poverty rates, and a higher frequency of hard-hitting financial crises (Dreher, 2006). However, some arguments seem to note that though globalization may lead to economic growth, then the magnitude of this effect is always overestimated, for instance, that if financial integration is found to have a positive impact on economic growth, there is yet no clear, verifiable and robust empirical proof that the effect is quantitatively significant.
Christmann, P., & Taylor, G. (2001). Globalization and the environment: Determinants of firm self-regulation in China. Journal of international business studies, 439-458.
Dollar, D., & Kraay, A. (2003). Institutions, trade, and growth. Journal of monetary economics, 50(1), 133-162.
Dollar, D., & Levin, V. (2006). The increasing selectivity of foreign aid, 1984–2003. World development, 34(12), 2034-2046.
Dreher, A. (2006). Does globalization affect growth? Evidence from a new index of globalization. Applied Economics, 38(10), 1091-1110.
Fujita, M., & Hu, D. (2001). Regional disparity in China 1985–1994: the effects of globalization and economic liberalization. The Annals of Regional Science, 35(1), 3-37.
Goldberg, P. K., & Pavcnik, N. (2007). Distributional effects of globalization in developing countries (No. w12885). National bureau of economic research.
Guan, X. (2000). China’s Social Policy: Reform and Development in the Context of Marketization and Globalization. Social Policy & Administration, 34(1), 115-130.
He, C., Wei, Y. D., & Xie, X. (2008). Globalization, institutional change, and industrial location: Economic transition and industrial concentration in China. Regional Studies, 42(7), 923-945.
Lee, E., & Vivarelli, M. (2006). The social impact of globalization in the developing countries. International Labour Review, 145(3), 167-184.
Rogoff, K., Wei, S. J., & Kose, M. A. (2003). Effects of financial globalization on developing countries: some empirical evidence (Vol. 17). Washington, DC: International Monetary Fund.
Wei, S. J., & Wu, Y. (2001). Globalization and inequality: Evidence from within China (No. w8611). National Bureau of Economic Research.
Zhang, K. H. (2001). How does foreign direct investment affect economic growth in China? Economics of Transition, 9(3), 679-693.