Empirical research examining the effects of several components of globalization on growth, using time series and cross sectional data on trade, FDI and portfolio investment, found that a country tends to have a lower degree of globalization if it generates higher revenues from trade taxes.
For them, globalization means increasing poverty and deteriorating living standard of the workers, widening disparity between the rich and the poor within the country and also among the countries, and internationalization of capital to the detriment of labor market.
However, it does not mean the same thing for all. Domestic industries in some countries may be endangered due to comparative or absolute advantage of other countries in specific industries.
Globalization is defined as a process that, based on international strategies, aims to expand business operations on a worldwide level, and was precipitated by the facilitation of global communications due to technological advancements, and socioeconomic, political and environmental developments.
In the developing countries, lack of efficient production facilities, adequate infrastructure, weak management capacities, low level of technology and lack of technological capacity and inefficient transportation, communication and education, limits their potential to specialize in crucial productive sectors and to reap the benefit of preferential trading facilities.
Also, the opening of trade and development of companies in places like China, for example, have led to huge increases in manufacturing and sales. The phenomenon of globalization began in a primitive form when humans first settled into different areas of the world; however, it has shown a rather steady and rapid progress in recent times and has become an international dynamic which, due to technological advancements, has increased in speed and scale, so that countries in all five continents have been affected and engaged.
Brain drain describes the emigration of educated and highly skilled workers. In most cases, it is described rather than defined. This will happen only if they are able to increase their ability to understand the multilateral trading regime espoused by the WTO and formulate their national policies to benefit from it.
Cheap imports flood markets and make locally produced goods unviable. Networked information systems are allowing companies to coordinate their geographically distributed capabilities and even coordinate with other organization as virtual corporation.
Of course the economic policy is not the only core human and social values.
As a step stone for fighting poverty and promoting democracy, people in the developing countries need to be trained and having access to the education and as the training and education is still cheaper in the LDC then the developed countries. Health Status and Longevity Another benefit to developing countries is the improvement of health services and the extension of life expectancy in the general populace.
Globalization can therefore be seen as a positive force for change that has the potential to raise living standards and drive economies forward.
In a global economy, power is the ability of a company to command both tangible and intangible assets that create customer loyalty, regardless of location. As a result, inequity develops among the working class creating a divide within the local economies. Although free trade increases opportunities for international trade, it also increases the risk of failure for smaller companies that cannot compete globally.Another benefit to developing countries is the improvement of health services and the extension of life expectancy in the general populace.
Increases in income and resources allow for greater access to food, medical services and health care. Yet, while things are improving for many developing countries, there are still areas of concern.
Some negative effects of globalization on developing countries include the exacerbation of income inequalities, the depletion of natural resources and the degradation of traditional cultures.
Other drawbacks include the increased spread of communicable. Developing countries such as India, China, Iraq, Syria, Lebanon, Jordan and some Africa's countries, have been affected by globalization, and whether negatively or positively, the economies of these countries have improved under the influence of globalization.
But reversing globalization, were it possible, would be an enormous setback. And embracing globalization piecemeal, while keeping a plethora of regulations in place, would be highly inefficient.
Research on the sources of growth shows several factors to be relevant to all countries, rich or poor. Globalization enables large companies to realize economies of scale that reduce costs and prices, which in turn supports further economic growth, although this can hurt many small businesses attempting to compete domestically.
Globalization and its effects on developing countries G lobalization – the growing integration of economies and societies around the world – has been one of the most hotly-debated topics in international economics over the past few years.Download