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Running head: GLOBALIZATION IN BUSINESS GLOBALIZATION IN BUSINESS Name of the student: Name of the University: Author Note:
GLOBALIZATION IN BUSINESS1 The aim of this paper is to discuss the impact of globalization in the global economy and found out the most influential factors that contribute to the growth of international trade. The impact of globalization has been a topic of argument as some of the critics find this to be the reason of the economic growth through the international trade benefitting all parts of the world. On the contrary, some of them find that changing economy of a few countries guided the path of globalization for which the distribution of wealth and economy were made possible. In this paper the impact of changing global economy and its impact upon the international business will be found out from the economic, social and cultural pints of view. In this regard, the analysis of Globalization, drivers of globalization, international trade, the blocs of nation like UE, entities like World Trade Organistion, advantages and disadvantage of globalization and the need of internationaltrade,consumertastes,tradebarriers,governmentregulationandmonetary currency of the different countries of the world will be done. The growth in the international trade is influenced by all the factors affecting the global economy and similarly the global business environment influences the growth and development of international business. The huge change and growth of the global economy has been recorded after the Second World War when most of the European countries along with the Asian ones got involved.in the late 19thand early 20thcentury paved the way for this huge global shift. The connectivity of the economy and culture increased after the two world wars and the sharing of knowledge and skills were initiated. In order to understandhow the growth of international trade has been influenced by the factors affecting the global economy, it is important to analyze the main factors relating to economy of the world. These factors include foreign direct investment, economies of scale, technological innovation, and interdependence among the countries, equity
GLOBALIZATION IN BUSINESS2 distribution and different GDP, monetary currency and buying capacity of the nations. Firstly the foreign direct investment tends to increase the global trade by helping to boost the technology transfer, growth of the global companies and industrial restructuring. The countries which lack economy to support the local brands to flourish, can allow FDI to promote the local and national companies to contribute in the national trade. Economies of scale has been enabled by the forces of globalization so that the larger companies can realize the scope for enhancing their capabilities and perform greatly in the foreign markets. This factor of economies of scale can reduce the cost and process and supports the economic growth in the nation. This however leads the market to get concentrated fast including the scope for both the bigger and smaller enterprises and compete domestically. The globalization has reduced the inequality in an effective way. The rich countries have bigger brands which are visiting the comparatively underdeveloped countries and strengthening the economy there. The gap in the market structure and market power between the developed and the developing nations are chief factors attracting the bigger international brands. By measuring market concentration in different parts of the world, these brands enter the markets and bring prosperity. Tis due to the fact that the entering of bigger brands can carte scope for strong supply chain as well as employment scopes. The countries with positive relation among themselves are unifying he economies through the better investment as well as trade (Rani, Ismail and Mohamed 2018). The scope of investment, employment and technological growth are being seen in those underdeveloped countries making them developing and independent. The gap between the capabilities of the developed and developing countries depend greatly upon the monetary currency which reflects the economic situation of the countries where the international trade will
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