- defined as a network of connections between different organizations and people across nations, economic and cultural borders and boundaries.
- Furthermore, through globalization, it can also help us in reducing barriers such as tariffs, value added taxes, subsidies via trading.
- It is also a process driven by international trade and investment and aided by information technology.
- This process has effects on the environment, on culture, on political systems, on economic development and prosperity, and on human physical well-being in societies around the world.
-Globalisation is becoming increasingly interconnected as a result of massively increased trade and cultural exchange. It helps to increase the production of goods and services.
- Globalisation has been taking place for hundreds of years, but has speeded up enormously over the last half-century.
- Globalisation has resulted in increased international trade, a company operating in more than one country, greater dependence on the global economy and free movement of capital, goods, and services.
1. Increase in economy of scales
- Through globalization, When countries are specialized in producing the goods and services where they have a comparative advantage in producing at lowest opportunity cost, the fixed cost would be lower when there is high amount of goods and services are being produced.
- When there is high amount of goods and services are being produced, they will get the excess amount of the product. Therefore, companies will even tend to expand their market and sell their goods and services to other country.
- As a result, the country will tend to have more savings, and it can use the funds to develop the country.
2. Labor learning skills( like the worker can learn the skills from the foregin firm think like how worker can learn )
- There would be high technology and skills transfer from other country ( developed country) to the local country ( developing country) due to globalization
- This is because when the local workers manage to learn an advanced skills and technology, the productivity and efficiency of a country will increase.
- For example, Malaysia car product like Proton, due to the collaboration with Japan automobile industry called Mitsubishi, the Malaysia workers tend to learn an advanced technology and managed to make a better car product.
3. Labor Migration
- Due to globalization, foreign labor from developing countries can get to work overseas and make a living as there are many job opportunities given compare to their own country.
- As a result, they get to increase their standard living and manage to improve their livings.
- For example, as Malaysia young generations do not really want to work in comforting job such as working in construction site, waiter, janitor. Therefore, Malaysia tend to import more foreign workers such as Bangladeshis, Nepalis, Myanmar workers to replace it.
4. Increasing in Foreign Funds