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International Trade and Some of The Investment Flows Among Advanced Economies, Mostly Focusing On The United States

The document discusses several key aspects of globalization: 1. Globalization refers to the growing interdependence of economies, cultures, and populations through cross-border trade, technology, investment, and information flows. 2. While globalization benefits society overall, it can harm certain groups. Understanding both costs and benefits is important. 3. Globalization is driven by international trade, investment, and information technology. It affects many aspects of societies worldwide.

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72 views

International Trade and Some of The Investment Flows Among Advanced Economies, Mostly Focusing On The United States

The document discusses several key aspects of globalization: 1. Globalization refers to the growing interdependence of economies, cultures, and populations through cross-border trade, technology, investment, and information flows. 2. While globalization benefits society overall, it can harm certain groups. Understanding both costs and benefits is important. 3. Globalization is driven by international trade, investment, and information technology. It affects many aspects of societies worldwide.

Uploaded by

Dave Victoriano
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Globalization is the word used to describe the growing interdependence of the world’s economies, cultures, and

populations, brought about by cross-border trade in goods and services, technology, and flows of investment,
people, and information. Countries have built economic partnerships to facilitate these movements over many
centuries. But the term gained popularity after the Cold War in the early 1990s, as these cooperative
arrangements shaped modern everyday life. This guide uses the term more narrowly to refer to
international trade and some of the investment flows among advanced economies, mostly focusing on the
United States.
The wide-ranging effects of globalization are complex and politically charged. As with major technological
advances, globalization benefits society as a whole, while harming certain groups. Understanding the relative
costs and benefits can pave the way for alleviating problems while sustaining the wider payoffs.
Globalization is a process of interaction and integration among the people, companies, and governments of
different nations, a process driven by international trade and investment and aided by information technology.
This process has effects on the environment, on culture, on political systems, on economic development and
prosperity, and on human physical well-being in societies around the world.

Increased Business Opportunities


Many companies today hire employees that are located in other countries. Using communication vehicles
such as video calling make it simple to converse with colleagues across the globe, almost making it feel as if
they are in the same room. Technology also makes it easier to connect with suppliers and customers all over
the world, and to streamline those relationship through improves ordering, shipment tracking and so on. With
this kind of communication technology, many businesses are able to take advantage of opportunities in
different countries or cities, improving the economic outlook on a global level.
Thanks to global communications, information itself can be transferred as a valuable business asset from one
country to another. This has the effect of making everyone's operations more modern and efficient, regardless
where they are located.

Fewer Cultural Barriers


Many people perceive culture to be the root of communication challenges. When people from two different
cultures try to exchange information, the way they speak, their body language or their mannerisms can be
interpreted differently by the other person. The way people approach problems and how they participate in
communities is all influenced by culture.
Globalization has made it possible, for example, for someone in Japan to understand how someone in the U.S.
goes about their day. With television and movies, cultural barriers are becoming less prevalent. Being able to
communicate effectively and frequently with colleagues or friends across the planet helps people understand
each other’s cultures a little better.

Creation of a Global Village


You’ve likely heard of the phrase "global village," coined by theorist Marshall McLuhan. Affected both by
globalization and global communication, the global village is created when distance and isolation no longer
matter because people are connected by technology. Wide-spread telephone and internet access have been
life-changing for many people across the world, especially those in developing countries. Many are now
enrolling in universities across the world without having to leave their desk chair. Virtual assistant jobs are
becoming commonplace, where employees from developing countries work with companies in North
America or Europe, providing administrative support and other business services that can easily be conducted
over the phone or via the internet.
Globalization and global communication have made it easier to see people on the other side of the world as a
neighbor, instead of a stranger from a faraway land. There is so much knowledge about other countries and
cultures available online, that it’s no longer a complete mystery.

Driving forces of globalization are:


1. Technology:
Faster and cheaper technology in the digital global economy of the Internet era has broken the national barrier
of time and space, thus, integration of national markets have been facilitated with ease.

2. Liberalization:
Strong wave of liberalization induced by the World Trade Organization (WTO) as well as unilateral
negotiations and decisions undertaken by the countries world over.

3. Trade Flows:
Removal of trade barriers time and again has facilitated a rising growth rate of the world trade over the years.
New technology under IT revolution has created distribution channel, which is difficult to be blocked under the
protectionist trade policy. For example, French government’s restriction on American films tends to be futile
when these are shown through satellite or Internet (Economist, 1999).

4. Capital Flows:
In the Internet Age, capital has become internationally more mobile.

5. Factor Mobility:
Mobility of individuals, information and knowledge, as agents of production and countries has smoothened the
growth process of globalization.

Several complex and sensitive issues are inherent in the process and proliferation of globalization including the
role of culture and political/social acceptance and alternation of the required attitudes towards the change and
involvement of the people at large in the global arena.

Patel (1998), identified the major ingredients of sustainable growth under globalization process of a developing
economy as under:

1. High savings ratio.


2. Capital accommodation.
3. Paving to invest and innovate.
4. Technology transformation.
5. Technology transfer.
6. Ambitious entrepreneurs.
7. Emergence of knowledge workers and knowledge management.
8. Framework of efforts and rewards and division maker acceptable to the community at large.
9. Spatial and occupational mobility of productive resources (Five M’s: Manpower, machine power, material
power, managerial power and money power).
10. Efficient information and communication system so as to minimize the effect of uncertainties.
11. Modernization over all.
The degree to which these elements are present defines the strategy of sustainable development and growth of a
developing economy under globalization process.

Effects of Globalization
Globalization has both positive and negative effects. On an individual level, globalization affects both the
standard of life and the quality of life. On a business level, globalization affects an organization's product life
cycle and an organization's balance sheet. Globalization also affects how governments throughout the world
create policies affecting areas such as monetary regulation and trade.

Individual Effects
On an individual level, globalization has affected the standard of life and quality of life of individuals and
families throughout the world. Standard of living is the level wealth, comfort, material goods, and necessities
available to a certain socioeconomic class in a certain geographic area. Quality of life is the degree to which a
person enjoys the important possibilities of his or her life. In many instances, quality of life has improved for
those who live in developing nations. For many developing nations, globalization has led to an improvement in
standard of living through improved roads and transportation, improved health care, and improved education
due to the global expansion of corporations. However, globalization has had a negative effect on individuals
who live in developed nations. This is due to the fact that corporations now have the option of establishing
manufacturing operations in nations where manufacturing and production costs are less expensive. As a result,
many manufacturing jobs leave developed nations and move to developing nations.

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