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HOW GLOBALIZATION AFFECTS THE ECONOMY

Globalization: Process of Integrating World Economies

Globalization is the process of integrating world economies through increased communication and indulgence in cultural, economic, and social exchanges. Globalization allows a country to open its borders to enhance external trade that increases foreign direct investments (FDI). Despite the generally acknowledged benefits of globalization, it contributes to a variety of world problems, especially for developing countries. Nonetheless, in developing economies, globalization plays a crucial role in developing countries by increasing opportunities for growth.

 

Globalization Increases Country's Opportunities

Globalization increases country's opportunities by availing knowledge and technical expertise that can be used to drive the manufacturing sector of economies. When a conglomerate opens branches in other countries, the transfer of knowledge occurs, which allows for the rapid growth of economies. This knowledge comes as a result of an influx of expatriates into developing countries along with pre-requisite technologies that can be used in manufacturing, agriculture, and transport among other industries. These industries are crucial to the economic development of a country. Without globalization, countries especially developing ones would be left to depend on internal sources of knowledge which might not be as effective as externally drawn knowledge. As such, globalization acts as the middle ground for the transfer of knowledge to and across countries, thereby paving a way of economic development.

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Uploaded on September 28, 2019