What is meant by globalization and how has it affected international trade and direct foreign investment?

Paul B.

Order the writing of a tailor-made Economy general Term papers

Free quote online

Thesis Format .doc

What is meant by "globalization" and how has it affected international trade and direct foreign investment?

Download

Read an extract

Reader
Abstract
Contents
Extract

Abstract

Globalisation can be defined as the trend toward greater interdependence among national institutions and economies (Wild, 2003). It can also be said that globalization is basically the cross-border exchange of economic, social and technological elements. Globalisation has had no shortage of its skeptics since its emergence to the international business environment. The left critics of globalization claim that the profits of globalization are not being distributed equally amongst nations that are involved, and basically is a case of the rich nations getting richer and the poor nations are being exploited. Anti-globalization activists also cite that globalization is just another word for "Americanization" because American values and culture is wide-spreading throughout the world in the form of American companies and products such as "Nike" and "McDonalds".

Introduction
Definition of globalization
Role of International Trade and Foreign Direct Investment
The implications of globalization
Conclusion
Bibliography

Get this table of contents for free after login.

Extract

[...] This increase in living standards has also brought about higher life expectancy and there is more food, more education, more democratization, less inequality and less oppression of women worldwide (Norberg, 2003) International Trade and Foreign Direct Investment International Trade can be defined as the purchase, sale, or exchange of goods and services across national borders. As recent times have ushered in the world's willingness to open up to trade and reduce its economic borders that once existed, countries are developing in a faster rate and their economies are getting stronger. [...]

[...] International trade and foreign direct investment has seen tremendous growth due to globalization and international businesses have embraced this concept and are already gearing towards a more borderless and less restricted international business environment. As Kofi Annan, the Secretary General of the United Nations, has said: "Whatever cause you champion, the cure does not lie in protesting against globalization itself. I believe the poor are poor not because of too much globalization, but because of too little." This statement is true; globalization is needed by both the poor and the rich nations in order to move into the next dimension of international business. [...]

[...] The management dimension is what distinguishes FDI from portfolio investment in foreign stocks, bonds and other financial instruments, according to the WTO press release on October 1996. Foreign direct investment has been expanding at a very fast space throughout the past decade and recorded growths of about 40% per year from 1995-2000. This tremendous rate of growth exceeds the growth of world production and trade. There are two main factors that account for the rising tide of FDI flows over the past decade or so, globalization and mergers and acquisitions (Wild, 2003). [...]

[...] This agreement has helped many New Zealand companies take advantage of new markets in Australia caused by the removal of trade and investment barriers. For example, Fisher & Paykel is a New Zealand based international company that produces mainly household appliances such as washing machines and refrigerators. In 1990, Fisher & Paykel expanded its operations into Australia when its production plant opened in Cleveland, Queensland. Originally employing 78 people, Cleveland now employs more than 400 people. Products from Cleveland are part of Fisher & Paykel's successful export push into the United States, the UK and other markets. [...]

[...] This goes to show that globalization has induced higher levels of foreign direct investment into Australia, encouraging new foreign enterprises to invest in Australia and also the pre- existing foreign enterprises in Australia to experience growth Conclusion Australia in the past decade or so, has been taking steps toward reducing trade and financial barriers, in other words Australia has embraced the concept of globalization. Australia seems to be a popular place for foreign direct investment due to its nation's vast amount of natural resources and also its extremely sound infrastructure in telecommunications and information technology. [...]

doc