Economic Globalization: A Comprehensive Analysis (Economics 101)

This essay provides a comprehensive overview of economic globalization, examining its key dimensions, including the international movement of goods, capital, services, and technology. It delves into the factors accelerating globalization, such as advancements in science and technology, market-oriented economic reforms, and the contributions of multinational corporations. The essay highlights the roles of international governmental organizations (IGOs), international non-governmental organizations (NGOs), and businesses in shaping the global economic landscape. It discusses the impact of globalization on production, finance, markets, and labor, while also addressing historical disruptions like World War I and the subsequent resurgence of global trade. The essay covers topics like containerized shipping, the London Stock Exchange's 'Big Bang', and the influence of globalization on both developed and developing countries. It concludes by analyzing the ways businesses participate in globalization, including international supply chains, outsourcing, and the operations of multinational corporations.

Economic globalization
• is one of the three main dimensions of globalization commonly found in
countries, academic literature, with the two others being political globalization
and cultural globalization, as well as the general term of globalization.
• Economic globalization refers to the widespread international movement of
goods, capital, services, technology and information. It is the increasing
economic integration and interdependence of national, regional, and local
economies across the world through an intensification of cross-border
movement of goods, services, technologies and capital.
• Economic globalization primarily comprises the globalization of production,
finance, markets, technology, organizational regimes, institutions, corporations,
and labour. While economic globalization has been expanding since the
emergence of trans-national trade, it has grown at an increased rate due to
improvements in the efficiency of long distance transportation, advances in
telecommunication, the importance of information rather than physical capital in
the modern economy, and by developments in science and technology.
• The rate of globalization has also increased under the framework of the General
Agreement on Tariffs and Trade and the World Trade Organization, in which
countries gradually cut down trade barriers and opened up their current
accounts and capital accounts.
• This recent boom has been largely supported by developed economies
integrating with developing countries through foreign direct investment, lowering
costs of doing business, the reduction of trade barriers, and in many cases
cross-border migration. While globalization has radically increased incomes and
economic growth in developing countries and lowered consumer prices in
developed countries, it also changes the power balance between developing
and developed countries and affects the culture of each affected country. And

the shifting location of goods production has caused many jobs to cross
borders, causing some workers to change careers.
• These advances in economic globalization were disrupted by World War I. Most
of the global economic powers constructed protectionist economic policies and
introduced trade barriers that slowed trade growth to the point of stagnation.
This caused a slowing of worldwide trade and even led to other countries
introducing immigration caps.
• Globalization did not fully resume until the 1970s, when governments began to
emphasize the benefits of trade. Today, follow-on advances in technology have
led to the rapid expansion of global trade.
• Three suggested factors accelerated economic globalization: advancement of
science and technology, market oriented economic reforms, and contributions
by multinational corporations. The 1956 invention of containerized shipping,
along with increases in ship sizes, were a major part of the reduction in shipping
costs. On 27 October 1986, the London Stock Exchange enacted newly
deregulated rules that enabled global interconnection of markets, with an
expectation of huge increases in market activity.
• This event came to be known as the Big Bang. Global actors International
governmental organizations An intergovernmental organization or internationa
governmental organization refers to an entity created by treaty, involving two or
more nations, to work in good faith, on issues of common interest. IGO's strive
for peace, security and deal with economic and social questions. Examples
include: The United Nations, The World Bank and on a regional level The North
• Atlantic Treaty Organization among others. International non-governmental
organizations International non-governmental organizations include charities,

non-profit advocacy groups, business associations, and cultural associations.
International charitable activities increased after World War II and on the whole
NGOs provide more economic aid to developing countries than developed
country governments.
• Businesses Businesses participate in globalization in a number of different
ways. Many businesses now have international supply chains, favoring
manufacturing in low-cost countries. Some engage in international outsourcing
to low-wage countries, which involves the contracting out of a business process
and operational, and/or non-core functions to another party . Multinational
corporations have business operations in multiple countries, either simply
because they want to sell goods and services into the local market, or because
a given country has advantages like natural resources, low wages, low taxes, or
a useful talent pool.