Globalization QuestionnaireGlobalization, according to the textbook International Business: Competing in the Global Marketplace, refers to the shift toward a more integrated and interdependent world economy. Globalization has different facets such as the globalization of markets and production, (Hill, 2005). The globalization of markets is the merging of national markets into one global marketplace. The globalization of production is the sourcing of goods and services from around the globe. Some international trade theories that support the concept of globalization are Mercantilism, Comparative Advantage, Absolute Advantage, Heckscher-Ohlin, and New Trade theories.
Major drivers of globalization:The major drivers of globalization would be declining trade and investment barriers, technology and communication and social-demographic changes. Trade barriers have been reduced and are shifting from closed and economy to open end economy. "The lowering of barriers to international trade enables firms to view the world, rather than a single country, as their market," (Hill, 2005).
The lowering of trade barriers has also facilitated the globalization of production. "According to data from the World Trade Organization, the volume of world trade has grown faster than the volume of world output since 1950," (Hill, 2005). Some examples of technology and communication would be internet, fax, cell phones, and transportation. Using these technologies create greater data flow and increase the amount of information that can be processed by individuals and firms. Social-demographic is a driver that has been a dramatic change in the demographics of the global economy. Examples of changing demographics would be the dominance in the world economy and world trade picture, dominance in world foreign direct investment, and dominance of large multinational U.S. firms on the international business scene.
Four effects of globalizationThere are several effects of globalization that impact our community and many organizations, such as increasing the market share and profits or...