Global Questionnaire Ã¯Â¿Â½ PAGE \* MERGEFORMAT Ã¯Â¿Â½1Ã¯Â¿Â½
What is globalization, and what are some of the traditional international trade theories that support the concept of globalization?
In the past, it can be argued that a countries economy was self contained and a majority of goods were developed and produced within one's own country due to border boundaries, long distance of other countries, difficult transportation methods and etc. In today's world, countries are continually finding ways to outsource jobs, import and export goods and integrate with other economies. Globalization is the process of moving toward a world in which barriers to cross-border trade and investment are declining; perceived distance is shrinking due to advances in transportation and telecommunications technology and the national economies are merging into an interdependent, integrated global economic system (Hill, 2009). In addition, the globalization of markets and productions are two of the several facets included in globalization.
The Ricardian Model is one of the international trade theories that support the concept of globalization. The Ricardian model states that the international trade will occur between countries and will be advantageous but the reason why countries trade is because of differences in production technology (Globalization and International Business, 2007). Another international trade theory is Specific Factor Model. The Specific Factor Model is primarily designed to show the effects of trade in an economy in which one factor of production is specific to one industry (Globalization and International Business, 2007).
List the major drivers of globalization and give three examples of each.
Hill claims there are two major factors that drive globalization, a decrease in barriers to the free flow in goods and services and the advancement of technology. A few examples of technology advancements that have impacted globalization are the Internet, World Wide Web, and the microprocessor.