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The Impact of Globalization on World Economies Students Name

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Globalization is the process of interaction among companies, persons and governments of diverse regions and countries. It is driven by information, technology, and international trade. It has impacts to the environment, economic development and even culture. This paper discusses the impacts of globalization to the economy of nations. The paper has been made complete by relying on previous research and collecting statistical analysis in relation to the topic in question. Global economic trends have united national and local markets in the globe erasing state borders. The same inevitable market trends and competitive pressures have imposed the new game, new rules of conduct and operations sweeping cultural and social diversities. This is supported by the facts about the high criteria of business, quality and efficiency, inevitable exhausting of human and natural resources, striving for higher profits, inefficiency and system inertia, the spread of the underground economy, environmental disasters, questionable moral values and non-ethics peers (Bojani, & Budimir, 2011, pp. 201). After the end of the cold war, the term globalization dominated the world. Globalization emerged with the spread of the modern information technology. It has brought opportunities to developing nations due to access to new technologies from developed nations. However,

globalization has also brought challenges like environmental deteriorations. Let us consider the impacts of globalization on the world economies (Aggarwal, 2008, pp. 7). Positive impacts of Globalization Globalization dominates and drives the world economies. After the past century, people began relying on market economy because they had more trust in private capital. Globalization has had a fair impact to developing economies. The following are some of the positive impacts of globalization on economies. To begin with, globalization has led to widespread trade in goods and services. Unlike local trade, in international trade, different resources are exchanged and are consistent. This leads to better productivity because resources are always available for specialization. It is known from the economic point of view that restrictive trade impedes development of emerging economies. These economies can get the advantage of international trade only when the resources are consistently available for utilization. On the other hand, the trade amid far-flung regions of the globe led to a global economy, technology was exported. Exporting of technology made nations to have more contact; they had to exchange their cultures including their political philosophy. This led to the emergence of philosophers like Marx and Smith whose works are read all over the globe. It also allowed people to expand their thoughts from their local area to the outside world. People developed the anxiety of traveling and exploring the world. Eventually this led to the emergence of more technologies, which have steered the development of economies. An example is the discovery of the airplane which was an idea that emerged out of globalization (Aggarwal, 2008, pp. 12).

Moreover, globalization enhances movement of capital. Movement of capital assists emerging economies to develop. This can be proved by following the economic development trend between the 19th and 20th centuries. As a result of mobility in capital, there were savings for the whole world, and this led to high investment potential. A nations economic development is not so much influenced by the domestic investments. Foreign capital flow plays a significant role in the growth of an economy. To be particular, capital flow takes the form of group investment or external direct investment. Therefore, developing nations would certainly select direct investment due to the reason that group investment does not have direct effect on the prolific capacity expansion. In addition, globalization leads to enhanced financial flows. The process of globalization is steered by capital market development. The development in capital and movement of the foreign exchange markets assisted in transfer of capitals cross borders which made the world foreign exchange market to improve. Development of foreign exchange market facilitates international transfer of capital. Therefore, globalization has positive impacts on the development of economies (Goyal, 2006, pp. 168). The negative impacts of globalization As much as globalization has positive effects on the economy it is also associated with negative effects. There are various challenges that have been encountered due to globalization. To begin with, globalization has brought inequality within different countries, instability in financial market open therefore, making the financial situation to worsen (Goyal, 2006, pp. 170).

In contrast, globalization has made the third world nations to be sidelined. Until the nineties, the progression of globalization in the Indian economy was guarded by trade, financial and investment barriers. Because of this, the liberation progression took time speed up compared to other economies. Additionally, economic assimilation by globalization led to free flow of ideas, data, technologies, people and finance. This cross border incorporation had diverse dimensions like culture erosion, economic drainage due to outflow of resources from developing countries at a cheaper price. Industrialization needed raw materials and these industrialized nations could not supply all the required raw materials themselves. In so doing, they turned to developing nations for raw materials. Then again, globalization led to increase in trade. Increase in trade caused rise in network interdependency in the nations of the globe. When Germany crossed to other nations to acquire raw materials like coal, these nations began to depend on the incomes they could get by exporting coal. They in turn used the incomes they gained to import German goods that they required for their personal use. As this went on for a long time this nations eventually stopped producing their own goods because they thought that what they were importing was cheaper than producing. With time, these nations lost their skills in producing some goods and completely begun relying on other nations to meet their requirements. Perhaps, this is what has led to poverty in many parts of Africa yet they viable land (Akwen, 2010, pp. 40). In conclusion, globalization is taken to be a usual and normal chapter in the social development in general, however, the effects of market rules, the interweaving of international policies and economic interdependence among national governments by the world order discreetly

imposing new market trends and new rules, violate national borders under the pressure of global connectedness, of information-communication technology development impact, unified culture and individual state uniformity. Therefore, enormous financial losses caused by a series of negative market trends have left mark on national and local market economic order changing in an unpredictable and undesired direction (Bojani, & Budimir, 2011, pp. 210). This paper has discussed all the possible impacts of globalization both negative and positive.

References Aggarwal, R. 2008. Globalization of the World Economy: Implications for the Business School', American Journal Of Business (American Journal Of Business), 23, 2, pp. 5-12. Akwen, G. 2010. Globalisation and Democratisation: Western And Third World Perspective', Culture & Religion Review Journal, 2010, 3, pp. 38-46.

Bojani, I, & Budimir, M.2011. Globalization and information-communication technology development impact on the new world order', Contemporary Legal & Economic Issues, pp. 201-210. Goyal, K.A. 2006. Impact of Globalization on Developing Countries (With Special Reference To India)', International Research Journal Of Finance & Economics, 5, pp. 166-171.