For example, Wal-Mart can often get goods to market a lot cheaper than your local corner store. This can create economies of scale, which means the cost of goods goes down as the number of goods you produce goes up. Larger (multi-national) corporations can produce products in bulk. Multinational corporations can move their manufacturing industries overseas to nations where the cost of production is low. The Great Depression and the Global Financial Crisis are two examples where economic problems in one part of the world (such as the United States) can lead to economic woes all around the world. Thus, a recession in one nation may have a flow-on effect and cause a recession in others. London is known as a finance hub, Los Angeles for technology (see also: technological globalization), and Seattle for aviation.Ī globalized economy means that each economy around the world is dependant on the success of others. One consequence of this is that there are now hub cities around the world focused on particular industries. This is known as the development of ‘economies of scale’ and leads to improved productivity. The major recent change has been the speed and ease with which this movement can happen for those with in-demand skills.Īs the globe’s economies have become increasingly intertwined, nations have developed expertise in specific industries. New world nations like the United States are built on movement of people seeking economic mobility. This concept of migration for work is not new. Those with in-demand skills can find work across the world before even stepping on an airplane and travel internationally for 12- to 36- month stints to conduct work overseas. White collar jobs in finance, engineering and related industries have benefited from globalisation. Some could also claim the quality of the goods may be affected if manufactured in countries with lower quality standards. This has allowed us to get cheaper goods, but has led to backlash from activists who have seen entire industries for blue collar workers collapse in developed nations. Now, if you look at the label on your clothing or electronics, you’ll often see a “Made in China” label. Those industries have been moved offshore, such as to Mexico, Vietnam and China, where labor regulations are sometimes less stringent and wages are lower. The past few decades have seen massive closing-down of manufacturing industries in developed nations. Similarly, Chinese industries have been quite aggressive in buying up farming land and industries around the world – which has led to some backlash from locals who feel as if local land should be owned by local people. This can inflate housing prices for locals.
Similarly, overseas buyers can flood a real estate market to buy up houses in international cities like Vancouver BC or Melbourne Australia. Now, an entrepreneur can get cheap low-repayment funding from overseas to set up a business venture. This was labelled by Arjun Appadurai as ‘financescapes’. In short, this means companies overseas can fund businesses all around the world. The growing ease with which companies (and individuals) can move money overseas has led to international capital markets.
#4 postive impacts of globalization on world economy free#
However, it has become increasingly easy for corporations to conduct international business thanks to tax treaties to help corporations avoid double taxation, free trade agreements such as NAFTA, and faster movement of goods and services.Ģ. The East India Company, for example, (established in 1600) used to trade teas and spices from Asia to Europe. Multinational corporations have existed for centuries. Globalization of economies has often allowed multinational corporations to move to offshore tax havens and low-tax nations to minimize their tax responsibilities to society. Accessed May 14, 2021.Multinational corporations include Coca-Cola, McDonalds, Amazon and Google. " Trade Liberalization and Rice Farming in Japan and Heilongjiang China." Accessed May 14, 2021.Īmerican Enterprise Institution. 731-TA-663 (Review)." Accessed May 14, 2021.įood and Fertilizer Technology Center for the Asian and Pacific Region.
" Paper Clips From China: Investigation No. United States International Trade Commission. " The New Dynamics of Financial Globalization." Accessed May 14, 2021. " Theorist Eric Maskin: Globalization Is Increasing Inequality." Accessed May 14, 2021. National Sovereignty." Accessed May 14, 2021. " Foreign Direct Investment for Development,". Organisation for Economic Co-operation and Development.
0 kommentar(er)
