1. What is globalization, and what are some of the traditional international trade theories that support the concept of globalization?
Globalization is a process of interaction and integration among the people, companies, and governments of different nations, 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. Globalization is not new, though. For thousands of years, people—and, later, corporations—have been buying from and selling to each other in lands at great ...view middle of the document...
2. List the major drivers of globalization and provide three examples of each.
Major Drivers Are:
Market driver (companies consider the various market to invest- shift of open market economics) cost driver (companies consider the various lifestyle of the country before considering the price of the product and services to rendered) technology driver(increasing technology system, transportation, advancing in the level of world trade system) government driver(reducing trade tariffs and non-trade tariffs, reducing the role of political policies) competition driver(organization becoming a global center, shift in open market system)
There are many issues which are resulting as the driver of the globalization and they are playing important role in the globalization of products and services. First of all the decreasing and lowering of the trade and investment hurdles internationally is one of the important reason. After the establishment of the world trade organization in which many countries participated due to the free trade agreements in the countries around the world. After the establishment of GATT (General Agreement of Tariff and Trade) it is the trade agreement between the countries that are willing to carry the free trade around the world.
The aim of these tariffs was to protect the local industries of those countries. But now the scholars of prosperity have though that the world would be become more peaceful and good place to live in when all the countries and their representatives coordinate with one another. The benefit of this is to the countries that do not have much source to utilize their resources so that they can attract the large foreign investment in their countries. The other reason is the Second World War which was held due to the economic gains and benefits between the counties. So this led to a new concept for the world.