1. What is globalization, and what are some of the traditional international trade theories that support the concept of globalization?According to Charles W.L. Hill, globalization refers to the shift toward a more integrated and interdependent world economy, with several different facets, including the globalization of markets and the globalization of production (Hill, 2009, p.6). Supporting the concept of globalization are several traditional international trade theories, including Free Trade, New Trade, Mercantilism, Absolute Advantage, Comparative Advantage, the Heckscher-Ohlin (Factor Proportions) model, the Ricardan model, the Product Life-Cycle theory, and Porter's Diamond (Hill, 2009).
2. List the major drivers of globalization and give three examples of each.
According to Charles W.L. Hill, there are two major factors that drive globalization. The first is the decline in barriers to the free flow of goods services, and capital since the end of WWII, and the second is technological changes, including the developments in communication, information processing, and transportation technologies (Hill, 2009).
I will give three examples of the above, starting with the decline in barriers. The General Agreement on Tariffs and Trade (GATT) has included multiple negotiations among over 150 member states that have worked to lower the barriers to the free flow of goods and services (Hill). A major driver was the 1993 round of negotiations known as the Uruguay Round, which further extended GATT to cover manufactured goods, provided enhanced protection for patents, trademarks, and copyrights, and established the World Trade Organization to police the international trading system (Hill).
The second and third examples would be included as technological changes that drive globalization. Firstly, is the single and most important innovation, which is the development of microprocessors. More than revolutionary, this development has enabled extensive growth in powerful computing, increasing the amount of information that can be processed and exchanged between...