essay on advantages of globalisation

Advantages and Disadvantages of Globalization Essay

When discussing the drawbacks and benefits of globalization, essays tend to be on the longer side. The example below is a brief exploration of this complex subject. Learn more in this concise globalization pros and cons essay.

Introduction

• Benefits and Disadvantages of Globalization

Reducing Negative Effects

In today’s world, globalization is a process that affects all aspects of people’s lives. It also has a crucial impact on businesses and governments as it provides opportunities for development while causing significant challenges. This paper discusses the advantages and disadvantages of globalization using evidence from academic sources. The report also suggests how governments and companies may implement to reduce the negative impact of the process.

Benefits and Drawbacks of Globalization

Globalization is a complex concept that can be defined by the process of interaction between organizations, businesses, and people on an international scale, which is driven by international trade. Some people may associate it with uniformity, while others can perceive it as the cause of diversification. The reason for such a difference in public opinion is that globalization has both advantages and disadvantages that should be analyzed.

The most significant positive aspects of globalization include global economic growth, the elimination of barriers between nations, and the establishment of competition between countries, which can potentially lead to a decrease in prices. Globalization supports free trade, creates jobs, and helps societies to become more tolerant towards each other. In addition, this process may increase the speed of financial and commercial operations, as well as reduce the isolation of poor populations (Burlacu, Gutu, & Matei, 2018; Amavilah, Asongu, & Andrés, 2017).

The disadvantages of globalization are that it causes the transfer of jobs from developed to lower-cost countries, a decrease in the national intellectual potential, the exploitation of labor, and a security deficit. Moreover, globalization leads to ecological deficiency (Ramsfield, Bentz, Faccoli, Jactel, & Brockerhoff, 2016). In addition, this process may result in multinational corporations influencing political decisions and offering unfair working conditions to their employees.

Firms and governments can work on eliminating the negative effects of globalization in the following ways. For example, countries should work on microeconomic policies, such as enhancing opportunities for education and career training and establishing less rigid labor markets. In addition, governments can build the necessary institutional infrastructure to initiate economic growth. To solve the problem of poor working conditions, it is vital to establish strict policies regarding minimum wages and the working environment for employees. A decrease in the national intellectual potential may be addressed by offering a broad range of career opportunities with competitive salaries, as well as educating future professionals on how their skills can solve problems on the local level.

Companies, in their turn, may invest in technologies that may lead to more flexible energy infrastructure, lower production costs, and decrease carbon emissions. They can also establish strong corporate cultures to support their workers and provide them with an opportunity to share their ideas and concerns. Such an approach may eliminate employees’ migration to foreign organizations and increase their loyalty to local organizations. It is vital for companies to develop policies aimed at reducing a negative impact on the environment as well by using less destructive manufacturing alternatives and educating their employees on ecology-related issues.

Globalization has a significant impact on companies, governments, and the population. It can be considered beneficial because it helps to eliminate barriers between nations, causes competition between countries, and initiates economic growth. At the same time, globalization may result in a decrease in the national intellectual potential, the exploitation of labor, and ecology deficiency. To address these problems, organizations and governments can develop policies to enhance the population’s education, improve working conditions, and reduce carbon emissions.

Amavilah, V., Asongu, S. A., & Andrés, A. R. (2017). Effects of globalization on peace and stability: Implications for governance and the knowledge economy of African countries. Technological Forecasting and Social Change , 122 (C), 91-103.

Burlacu, S., Gutu, C., & Matei, F. O. (2018). Globalization – Pros and cons. Calitatea , 19 (S1), 122-125.

Ramsfield, T. D., Bentz, B. J., Faccoli, M., Jactel, H., & Brockerhoff, E. G. (2016). Forest health in a changing world: Effects of globalization and climate change on forest insect and pathogen impacts. Forestry , 89 (3), 245-252.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2023, October 29). Advantages and Disadvantages of Globalization Essay. https://ivypanda.com/essays/advantages-and-disadvantages-of-globalization/

"Advantages and Disadvantages of Globalization Essay." IvyPanda , 29 Oct. 2023, ivypanda.com/essays/advantages-and-disadvantages-of-globalization/.

IvyPanda . (2023) 'Advantages and Disadvantages of Globalization Essay'. 29 October.

IvyPanda . 2023. "Advantages and Disadvantages of Globalization Essay." October 29, 2023. https://ivypanda.com/essays/advantages-and-disadvantages-of-globalization/.

1. IvyPanda . "Advantages and Disadvantages of Globalization Essay." October 29, 2023. https://ivypanda.com/essays/advantages-and-disadvantages-of-globalization/.

Bibliography

IvyPanda . "Advantages and Disadvantages of Globalization Essay." October 29, 2023. https://ivypanda.com/essays/advantages-and-disadvantages-of-globalization/.

• Disease Ecology Definition
• Ecology of Commerce: Green Taxes
• The American Black Bear's Ecology
• Managing Multinational Operations
• Multinational Corporations Economic Implications
• Globalisation and Labour Market
• Impact of Globalisation on Labour
• The Origins of the Modern World

The Advantages of Globalization

Introduction, accessibility of technology, choice of culture, diverse culture products, sharing knowledge, reference list.

The world is fast becoming a global village, seemingly smaller than it was a decade ago. This scenario has resulted from the development of trade and transport systems, thus making it conducive for movement of people, goods, services, and ideas and creating diversity in social, economic, political, and cultural views across the world. The technological revolution has also played a critical role in advancing globalization.

Globalization is an age-old concept, even though it has elicited great discourses in contemporary times as compared in the past where the idea of a global village seemed farfetched. Globalization is the process of growth and interconnection of world economies and cultures, which are aided by transport and trade. This process has been in progress for hundreds of years although at a much slower pace than in recent years as aforementioned.

It affects the cultural, economic, and social spheres of society. As with every thing else, globalization has both advantages and disadvantages. This paper highlights some of the positive effects that globalization has on all spheres of human interaction including the sharing of cultural products such as music, sports, and movies, knowledge, technology, and foods from different cultures.

A few decades ago, the majority of the contemporary technology was non-existent in most developing countries. People had to do almost everything manually including basic tasks such as doing laundry, cleaning floors, and cooking. However, this scenario was different in most developed countries as they already had some of the technology needed to carry out such tasks with ease.

However, with the improvement and advancement in modes of transport in developing countries, developed countries found new markets in most parts of Africa and Asia and products such as vacuum cleaners, microwaves, and washing machines found their way to developing countries. The main advantage of this development is that it has drastically improved the quality of work done while reducing the amount of time spent doing the same.

This aspect consequently improves the lifestyles of the people using the machines (Rifkin, 2003, Spiritual Perspectives on Globalization, p.176). Nevertheless, western countries are constantly modifying these products and making them more efficient. Today, it does not take a decade for any new technology to be available to consumers in developing countries.

Globalization has opened boundaries across the world, and a new technology in the United States will only take a few months before hitting the market in developing countries. Also, the transport systems have drastically evolved from the use of steam engines and ships to using electric trains and airplanes.

Communication is also easier now with the introduction of hi-tech mobile telephones that connect people both in the same country and with people in different continents at the touch of a button (. The ultimate result of such developments is that people in different areas of the world are in a position to enjoy the benefits of products not ordinarily available to them in their own countries and have expansive markets in other parts of the world.

Marketing forums like Amazon, e-Bay and many other online trading forums enable consumers to purchase goods and services online regardless of one’s location (Pew Global Attitudes Project, 2007, p.177-178).

Globalization has led to the introduction of diverse cultural practices in places where originally there existed only one practice. A century ago, a certain culture was a specific aspect unique to a certain society. For instance, the Chinese culture was specific to people and residents of China, European culture was specific to people living in Europe and African culture specific to Africa.

However, ease of trade and travel has changed this dynamic by making most societies multicultural, with everyone having the freedom to embrace his or her culture of preference rather than being restricted to the culture of birth. For instance, it is Chinese culture that children should not buy food with their own money.

This cultural pursuit seeks to encourage children to eat whatever that their parents place before them, consequently encouraging healthy eating. Nevertheless, since the McDonalds opened its first branch in Beijing in 1992, this cultural requirement has changed drastically.

McDonald’s services, which include hosting birthday parties, appealed to children regardless of the fact that birthdays are not culturally celebrated in China either (The Levin Institute, n.d. Globalization and Culture: Globalization and local culture, p.180).

Also, the introduction of Starbucks, an American coffee retail enterprise, in Italy has given the people of Italy a choice between maintaining their culture of drinking coffee in small and relaxed establishments and ordering coffee at Starbucks to drink on the go at their convenience. There are also other restaurants established for the sole purpose of selling food associated with specific cultures.

There are restaurants that only make Italian cuisine, Chinese cuisine, Japanese cuisine, and French cuisine to mention but a few, while others take pride in being inclusive and serving cuisines from different cultures (Hastings, Thiel & Thomas, 2003, The deadly noodle, p.180). This aspect gives every individual a chance to either try something new or stick to what is familiar.

Another good example is fashion and how different cultures influence their trends. For instance, people associate the Kenyan Maasai kikoi with East Africa and the Ankara with West Africa. Therefore, a person may use any of the two fabrics or use them together to give an African feel to his or her outfit. The beauty of the freedom to choose elements from different cultures is that it creates diversity and nurtures an appreciation for different cultures.

It also creates opportunities to develop new and unique cultures made from the combination of cultures from different societies as well as a means to celebrate similarities. Sports are one such similarity, which is celebrated worldwide through the organization of events that bring different countries together to compete in various disciplines. The Olympics and the FIFA World Cup are examples of such events.

During these events, people from different cultures meet and exchange ideas and practices. Also, some sports are specific to some countries; for instance, the Chinese acrobatics, and through such events, other countries get to learn about these sports, which are specific to some cultures.

Apart from increasing the availability of consumer goods, globalization has increased production and trade of culture products and services such as music and movies. Cultural products and services are products and services that echo the lifestyles and cultural background of a given society. For instance, movies vary depending on the part of the world they come from and the culture in force in that particular part of the world.

For example, the United States developed the ‘Hollywood’ trademark for outstanding movies and other artistic displays that best defined what the culture is like in that part of the world(The Levin Institute, n.d. Globalization and Culture: Globalization and local culture, p.180). They packaged these performances and sold them as a commodity within the American borders.

As globalization progressed, other parts of the world such as Asia and Africa provided a ready market for this commodity. It also created a platform for different cultures around the world to share their experiences whether political, social-cultural, or economical.

It did not take long for Asia and Africa to start producing movies using the knowledge gained from the commodity they bought and incorporating their own cultural experiences into the stories.

Bollywood is the Asian version of this commodity while the Nollywood is the African version produced in the West African region.

Just like the example given earlier on regarding the choice of a culture where people establish restaurants serving specific foods from different parts of the world, the IMAX Company based in the United States is recorded to have opened six hundred and ninety-seven (697) movie theaters in fifty-two countries worldwide by September of 2012.

These theaters provide an avenue for people to enjoy the American movie-watching culture in an authentic American environment (The Levin Institute, n.d. Globalization and Culture: Globalization and local culture, p.180).

Air transportation has made it possible for people to leave one part of the world to learn and gain knowledge in another part of the world.

The Internet and by extension the social media platforms such as Facebook and Twitter have made haring of information, and consequently, knowledge easier and faster as information is relayed in real time to people all over the world (Knickerbocker, 2004, If Poor Get Richer; Does the World See Progress? page 185-186).

The Internet burst has facilitated knowledge sharing by a great margin, and even now, people in developing countries can undertake online studies offered in learning institutions in developing countries. Thanks to globalization, people can have cures to most of the diseases across the world.

A cure discovered in one part of the world now means a cure for the rest of the world. For instance, courtesy of the efforts of Dr. Jonas Salk in the early 1950s who invented the Polio vaccine the disease is now preventable. However, this achievement would not be possible without means of sharing information.

This information-sharing aspect is not only important in issues regarding medicine, but also in political, social, environmental and economic issues. As long as there is an interconnection of interests, through trade, for instance, it is crucial to ensure that there is a flow of information and knowledge.

A good example of why this element is important is the global financial meltdown that occurred throughout the world like a ripple effect to a credit crisis in Europe. Had there been information regarding the credit crunch on the onset, most of the countries with financial links to credit institutions in Europe would have taken necessary measures to prevent a global meltdown.

World leaders hold conventions in different places at different times of the year all over the world to discuss various ways of ensuring conservation and sustainability of the environment because what happens in one part of the world affects the rest of the world.

Carbon emissions, for example, affect the o-zone layer thus causing global warming across the world, regardless of the origin of the emissions (Knickerbocker, 2004, If Poor Get Richer; Does the World See Progress?, page 185-186).

Since every element has a negative side, globalization has numerous positive aspects that have changed the lives of many individuals across the world. The process is continuous and finds new ways of linking various parts of the world together.

Through globalization, culture has defied territorial boundaries, thus allowing the sharing of life-changing knowledge coupled with the development and sharing of technology. Globalization has created diversity in every part of the world and made people to appreciate both what is within and outside their territorial borders.

Hastings, M., Thiel, S., & Thomas, D. (2003). The deadly noodle. Newsweek, 141 (3), 180-182.

Knickerbocker, B. (2004). Globalization and sustainability: If Poor Get Richer, Does World See Progress? The Christian Science Monitor . Web.

Pew Global Attitudes Project. (2007). World publics welcome global trade-But not  immigration.  

Rifkin, I. (2003). Framing articles: What is globalization: Spiritual Perspectives on  Globalization. Woodstock, VT: Skylight Paths Publishers.

The Levin Institute State University. (n.d.). Globalization and Culture: Globalization and  local culture. Web.

Cite this paper

• Chicago (N-B)
• Chicago (A-D)

StudyCorgi. (2020, April 16). The Advantages of Globalization. https://studycorgi.com/the-advantages-of-globalization/

"The Advantages of Globalization." StudyCorgi , 16 Apr. 2020, studycorgi.com/the-advantages-of-globalization/.

StudyCorgi . (2020) 'The Advantages of Globalization'. 16 April.

1. StudyCorgi . "The Advantages of Globalization." April 16, 2020. https://studycorgi.com/the-advantages-of-globalization/.

Bibliography

StudyCorgi . "The Advantages of Globalization." April 16, 2020. https://studycorgi.com/the-advantages-of-globalization/.

StudyCorgi . 2020. "The Advantages of Globalization." April 16, 2020. https://studycorgi.com/the-advantages-of-globalization/.

This paper, “The Advantages of Globalization”, was written and voluntary submitted to our free essay database by a straight-A student. Please ensure you properly reference the paper if you're using it to write your assignment.

Before publication, the StudyCorgi editorial team proofread and checked the paper to make sure it meets the highest standards in terms of grammar, punctuation, style, fact accuracy, copyright issues, and inclusive language. Last updated: January 27, 2022 .

If you are the author of this paper and no longer wish to have it published on StudyCorgi, request the removal . Please use the “ Donate your paper ” form to submit an essay.

An economist explains the pros and cons of globalization

Piling up: Global trade has increased, but has it been a positive or negative force? Image:  REUTERS/Tyrone Siu

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} Gita Gopinath

Ceri parker.

.chakra .wef-9dduvl{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-9dduvl{font-size:1.125rem;}} Explore and monitor how .chakra .wef-15eoq1r{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;color:#F7DB5E;}@media screen and (min-width:56.5rem){.chakra .wef-15eoq1r{font-size:1.125rem;}} Global Governance is affecting economies, industries and global issues

.chakra .wef-1nk5u5d{margin-top:16px;margin-bottom:16px;line-height:1.388;color:#2846F8;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-1nk5u5d{font-size:1.125rem;}} Get involved with our crowdsourced digital platform to deliver impact at scale

Stay up to date:, global governance.

Every industrial revolution has driven a wave of globalization. The first wave was driven by innovations such as the steam engine and the industrial weaving machine; the second by the assembly line, the car and the plane; and the third by the digital revolution.

As we enter the fourth wave of globalization, driven by the digital revolution, there is renewed debate over whether it is a beneficial force: powering economic growth, and allowing the spread of ideas to improve people’s lives; or whether it erodes communities, and widens the gap between the elites and the rest of the world.

Globalization results in increased trade and lower prices. It heightens competition within domestic product, capital, and labour markets, as well as among countries adopting different trade and investment strategies.

But how do these impacts net out? What are the positive and negative effects of globalization? The below is an edited transcript of a conversation with Gita Gopinath, Chief Economist of the International Monetary Fund (IMF).

Overall, what are the advantages of globalization?

The advantages of globalization are actually much like the advantages of technological improvement. They have very similar effects: they raise output in countries, raise productivity, create more jobs, raise wages, and lower prices of products in the world economy.

What might be the advantages of globalization that someone would feel in their day-to-day life?

I think something that's not sufficiently appreciated about, for instance, international trade is that it reduces the prices of goods that they consume. So if you look at day-to-day things that you purchase, in terms of washing machines, or cars, or even clothing, because of international trade we've had a decline in prices of these goods, so they have become far more affordable for a lot of people in the world.

How have the benefits played out in advanced economies versus poorer ones over the last three decades?

Both advanced economies and developing economies have benefited overall in terms of having higher productivity, more job creation, and higher wages. As we've always known, and this is true again with technology, there are always some winners and losers. So there are communities and there are workers who lose out when there is more trade integration. That is what we're seeing right now in terms of discontent with international trade.

Who have been the biggest losers?

The biggest losers from international trade are always those whose skills have a cheaper competitor in a different market. So, in the case of the US, it's been those who work in the manufacturing sector because jobs in the manufacturing sector have been outsourced to countries where labour is far cheaper.

On the other hand, in developing countries, more capital-intensive goods get imported more cheaply from the outside. So if you're a manufacturer of a capital-intensive good in a developing country you tend to lose because of that competition.

This is how it is with international trade: production goes to wherever it is most efficient to produce. So, when people in any country are exposed to this kind of competition, some win and some lose.

Is it possible as an economist to come up with a verdict? Has this wave of globalized trade been a net positive or a net negative?

If you say, I'm going to look at it from a measure of overall effect on a country's income, on its purchasing power, on the prices that its people pay, overall I think the evidence that we have all points to it being a net positive.

Now, if you frame the question as, has international trade been good for the manufacturing worker in the US? Then the answer to that would be “not fully”; it's been very costly in terms of jobs and wages for them.

How optimistic are you that this next wave of globalization offers a better future?

I would make a couple of points. First, the previous waves of globalization have been quite successful in lifting a large number of people out of poverty and so we should appreciate that.

The second thing is that any form of globalization will generate winners and losers. So even if you have the perfect, most optimal international trade agreements, there will always be those who lose out because of competition, in the exact same way that people lose out whenever there's a new technology being developed.

And so if we want to make sure that the next wave of globalization is even more successful, it has to be complemented with good, sound domestic policies that help those who are getting left out.

How optimistic are you that the trade war between the US and China will be swiftly resolved?

It's absolutely essential that it be resolved, and it gets resolved in a way that's long lasting. The world economy has lived with the uncertainty about trade tensions for a while now and if there is any solution and there is a sense that the solution is only transitory and something can again get triggered in the future, I think that's very costly.

I'd say I'm mildly optimistic because I think leaders in the world are recognizing that these trade tensions are having a negative effect on their economies and so it would make sense to sit down and resolve it.

Don't miss any update on this topic

Create a free account and access your personalized content collection with our latest publications and analyses.

License and Republishing

World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:

The agenda .chakra .wef-n7bacu{margin-top:16px;margin-bottom:16px;line-height:1.388;font-weight:400;} weekly.

A weekly update of the most important issues driving the global agenda

.chakra .wef-1dtnjt5{display:-webkit-box;display:-webkit-flex;display:-ms-flexbox;display:flex;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;-webkit-flex-wrap:wrap;-ms-flex-wrap:wrap;flex-wrap:wrap;} More on Global Cooperation .chakra .wef-17xejub{-webkit-flex:1;-ms-flex:1;flex:1;justify-self:stretch;-webkit-align-self:stretch;-ms-flex-item-align:stretch;align-self:stretch;} .chakra .wef-nr1rr4{display:-webkit-inline-box;display:-webkit-inline-flex;display:-ms-inline-flexbox;display:inline-flex;white-space:normal;vertical-align:middle;text-transform:uppercase;font-size:0.75rem;border-radius:0.25rem;font-weight:700;-webkit-align-items:center;-webkit-box-align:center;-ms-flex-align:center;align-items:center;line-height:1.2;-webkit-letter-spacing:1.25px;-moz-letter-spacing:1.25px;-ms-letter-spacing:1.25px;letter-spacing:1.25px;background:none;padding:0px;color:#B3B3B3;-webkit-box-decoration-break:clone;box-decoration-break:clone;-webkit-box-decoration-break:clone;}@media screen and (min-width:37.5rem){.chakra .wef-nr1rr4{font-size:0.875rem;}}@media screen and (min-width:56.5rem){.chakra .wef-nr1rr4{font-size:1rem;}} See all

How global joint ventures can thrive in times of turmoil

Rahul Khubchandani and Ed Gore-Randall

May 2, 2024

What bullet-proof Kevlar teaches us about cooperation and resilience

Aba Schubert

April 26, 2024

Japan and the Middle East: Japan can be a bridge in an era of global fragmentation and conflict

Kiriko Honda

April 25, 2024

Practice of long-term thinking: How to leverage foresight to address the transformational challenges ahead

Lasse Jonasson

April 24, 2024

Unlocking Africa's $1 trillion food economy: The role of global aid and sustainable technology

Energy for development: Everything you need to know from #SpecialMeeting24

Ella Yutong Lin and Kate Whiting

April 23, 2024

• Writing Correction
• Online Prep Platform
• Online Course
• Speaking Assessment
• Ace The IELTS
• Target Band 7
• Practice Tests Downloads
• IELTS Success Formula
• Essays Band 9 IELTS Writing Task 2 samples – IELTS Band 9 essays
• Essays Band 8 IELTS Writing – samples of IELTS essays of Band 8
• Essays Band 7 IELTS Writing – samples of IELTS essays of Band 7
• Essays Band 6 IELTS Writing – samples of IELTS essays of Band 6
• Essays Band 5 IELTS Writing – samples of IELTS essays of Band 5
• Reports Band 9 IELTS Writing – samples of IELTS reports of Band 9 (Academic Writing Task 1)
• Reports Band 8 IELTS Writing – samples of IELTS reports of Band 8
• Reports Band 7 IELTS Writing – samples of IELTS reports of Band 7
• Letters Band 9 IELTS Writing Task 1 – samples of IELTS letters of Band 9
• Letters Band 8 IELTS Writing – samples of IELTS letters of Band 8
• Letters Band 7 IELTS Writing – samples of IELTS letters of Band 7
• Speaking Samples
• Tests Samples
• 2023, 2024 IELTS questions
• 2022 IELTS questions
• 2021 IELTS questions
• 2020 IELTS questions
• High Scorer’s Advice IELTS high achievers share their secrets
• IELTS Results Competition
• IELTS-Blog App

IELTS Essay, topic: The advantages and disadvantages of globalization

• IELTS Essays - Band 8

Even though globalization affects the world’s economies in a very positive way, its negative side should not be forgotten. Discuss.

Globalization is such a commonly used term in the century. It simply means that the world has become integrated economically, socially, politically and culturally through the advances of technology, transportation and communication. It is undeniable that globalization has resulted in both positive and negative effects which must be addressed accordingly.

Secondly, several companies from the more developed countries have already ventured to establish foreign operations or branches to take advantage of the low cost of labor in the poorer countries. This kind of business activity will provide more influx of cash or investment funds into the less developed countries.

However, one cannot deny the negative effects which derived from globalization. One crucial social aspect is the risk and danger of epidemic diseases which can easily be spread as the transportation becomes easier and faster in today’s advanced society. This is evidenced in the recent birds flu disease which has infected most Asian countries over a short period of time.

As large corporations invest or take over many offshore businesses, a modern form of colonization will also evolve which may pose certain power pressure on the local governments of the less developed countries. Unemployment rates in the more developed regions such as Europe may also escalate as corporations choose to outsource to the cheaper work force from Asian countries.

In conclusion. to reiterate that globalization is inevitable and we must urge individuals, companies and governments to use a more balanced approach by taking the appropriate steps to deal with matters relating to the financial or economical gains verses the social, political or ecological concerns of the world.

This essay is too long, 318 words instead of 250-265. Otherwise (except for some minor grammatical errors) it is a very nice work. It covers the task, has the right structure, the paragraphs are coherent and are logically connected by elegantly used linking words, the structure of sentences is fine and so is your vocabulary. Seems worthy of Band 7.5 or 8.

Click here to see more IELTS essays of band 8

Related posts:

• IELTS essay, topic: Some say that new homes should be constructed in existing cities while others argue that new towns should be built (advantages/disadvantages) Many countries are experiencing population growth and need to build...
• IELTS essay, topic: The advantages and disadvantages of high-rise apartment living This is a model response to a Writing Task 2...
• IELTS Essay, topic: In some countries private cars are now banned from city centres (advantages / disadvantages) This is a model response to a Writing Task 2...
• IELTS essay, topic: Many university students nowadays live away from home and their parents (advantages/disadvantages) This essay topic was seen in a recent IELTS test...

8 thoughts on “IELTS Essay, topic: The advantages and disadvantages of globalization”

Pingback:  IELTS Essay Samples of Band 8 | IELTS-Blog

Can i send my essay for review?

Hi Sawraj, yes of course, you’re welcome to send us your essays for review. Please visit this page to learn how to do it.

This is awesome effort.

Hlo may I snd my essay for review Plzz

Hi Harpreet, to send you essay for correction please visit this page , make a payment and we will send you some easy instructions how to send your task to our teachers.

Leave a Reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Globalization: Definition, Benefits, Effects, Examples – What is Globalization?

• Publié le 21 January 2019
• Mis à jour le 25 March 2024

Globalization – what is it? What is the definition of globalization? Benefits and negative effects? What are the top examples of globalization? What famous quotes have been said about globalization?

What is Globalization? All Definitions of Globalization

A simple globalization definition.

Globalization means the speedup of movements and exchanges (of human beings, goods, and services, capital, technologies or cultural practices) all over the planet. One of the effects of globalization is that it promotes and increases interactions between different regions and populations around the globe.

• Related: Traveling Today And Tomorrow: Cities And Countries With More Travelers

An Official Definition of Globalization by the World Health Organization (WHO)

According to WHO , globalization can be defined as ” the increased interconnectedness and interdependence of peoples and countries. It is generally understood to include two inter-related elements: the opening of international borders to increasingly fast flows of goods, services, finance, people and ideas; and the changes in institutions and policies at national and international levels that facilitate or promote such flows.”

What Is Globalization in the Economy?

According to the Committee for Development Policy (a subsidiary body of the United Nations), from an economic point of view, globalization can be defined as: “(…) the increasing interdependence of world economies as a result of the growing scale of cross-border trade of commodities and services, the flow of international capital and the wide and rapid spread of technologies. It reflects the continuing expansion and mutual integration of market frontiers (…) and the rapid growing significance of information in all types of productive activities and marketization are the two major driving forces for economic globalization.”

• Related: Planet VS Economy: How Coronavirus Is Unraveling A Dysfunctional System

What Is Globalization in Geography?

In geography, globalization is defined as the set of processes (economic, social, cultural, technological, institutional) that contribute to the relationship between societies and individuals around the world. It is a progressive process by which exchanges and flows between different parts of the world are intensified.

Globalization and the G20: What is the G20?

The G20 is a global bloc composed by the governments and central bank governors from 19 countries and the European Union (EU). Established in 1999, the G20 gathers the most important industrialized and developing economies to discuss international economic and financial stability. Together, the nations of the G20 account for around 80% of global economic output, nearly 75 percent of all global trade, and about two-thirds of the world’s population.

G20 leaders get together in an annual summit to discuss and coordinate pressing global issues of mutual interest. Though economics and trade are usually the centerpieces of each summit’s agenda, issues like climate change, migration policies, terrorism, the future of work, or global wealth are recurring focuses too. Since the G20 leaders represent the “ political backbone of the global financial architecture that secures open markets, orderly capital flows, and a safety net for countries in difficulty”, it is often thanks to bilateral meetings during summits that major international agreements are achieved and that globalization is able to move forward.

The joint action of G20 leaders has unquestionably been useful to save the global financial system in the 2008/2009 crisis, thanks to trade barriers removal and the implementation of huge financial reforms. Nonetheless, the G20 was been struggling to be successful at coordinating monetary and fiscal policies and unable to root out tax evasion and corruption, among other downsides of globalization. As a result of this and other failures from the G20 in coordinating globalization, popular, nationalist movements across the world have been defending countries should pursue their interests alone or form fruitful coalitions.

How Do We Make Globalization More Just?

The ability of countries to rise above narrow self-interest has brought unprecedented economic wealth and plenty of applicable scientific progress. However, for different reasons, not everyone has been benefiting the same from globalization and technological change: wealth is unfairly distributed and economic growth came at huge environmental costs. How can countries rise above narrow self-interest and act together or designing fairer societies and a healthier planet? How do we make globalization more just?

According to Christine Lagarde , former President of the International Monetary Fund, “ debates about trade and access to foreign goods are as old as society itself ” and history tells us that closing borders or protectionism policies are not the way to go, as many countries doing it have failed.

Lagarde defends we should pursue globalization policies that extend the benefits of openness and integration while alleviating their side effects. How to make globalization more just is a very complex question that involves redesigning economic systems. But how? That’s the question.

Globalization is deeply connected with economic systems and markets, which, on their turn, impact and are impacted by social issues, cultural factors that are hard to overcome, regional specificities, timings of action and collaborative networks. All of this requires, on one hand, global consensus and cooperation, and on the other, country-specific solutions, apart from a good definition of the adjective “just”.

When Did Globalization Begin? The History of Globalization

For some people, this global phenomenon is inherent to human nature. Because of this, some say globalization begun about 60,000 years ago, at the beginning of human history. Throughout time, human societies’ exchanging trade has been growing. Since the old times, different civilizations have developed commercial trade routes and experienced cultural exchanges. And as well, the migratory phenomenon has also been contributing to these populational exchanges. Especially nowadays, since traveling became quicker, more comfortable, and more affordable.

This phenomenon has continued throughout history, notably through military conquests and exploration expeditions. But it wasn’t until technological advances in transportation and communication that globalization speeded up. It was particularly after the second half of the 20th century that world trades accelerated in such a dimension and speed that the term “globalization” started to be commonly used.

• Are we living oppositely to sustainable development?

Examples of Globalization (Concept Map)

Because of trade developments and financial exchanges, we often think of globalization as an economic and financial phenomenon. Nonetheless, it includes a much wider field than just flowing of goods, services or capital. Often referred to as the globalization concept map, s ome examples of globalization are:

• Economic globalization : is the development of trade systems within transnational actors such as corporations or NGOs;
• Financial globalization : can be linked with the rise of a global financial system with international financial exchanges and monetary exchanges. Stock markets, for instance, are a great example of the financially connected global world since when one stock market has a decline, it affects other markets negatively as well as the economy as a whole.
• Cultural globalization : refers to the interpenetration of cultures which, as a consequence, means nations adopt principles, beliefs, and costumes of other nations, losing their unique culture to a unique, globalized supra-culture;
• Political globalization : the development and growing influence of international organizations such as the UN or WHO means governmental action takes place at an international level. There are other bodies operating a global level such as NGOs like Doctors without borders  or Oxfam ;
• Sociological globalization : information moves almost in real-time, together with the interconnection and interdependence of events and their consequences. People move all the time too, mixing and integrating different societies;
• Technological globalization: the phenomenon by which millions of people are interconnected thanks to the power of the digital world via platforms such as Facebook, Instagram, Skype or Youtube.
• Geographic globalization: is the new organization and hierarchy of different regions of the world that is constantly changing. Moreover, with transportation and flying made so easy and affordable, apart from a few countries with demanding visas, it is possible to travel the world without barely any restrictions;
• Ecological globalization: accounts for the idea of considering planet Earth as a single global entity – a common good all societies should protect since the weather affects everyone and we are all protected by the same atmosphere. To this regard, it is often said that the poorest countries that have been polluting the least will suffer the most from climate change .

The Benefits of Globalization

Globalization has benefits that cover many different areas. It reciprocally developed economies all over the world and increased cultural exchanges. It also allowed financial exchanges between companies, changing the paradigm of work. Many people are nowadays citizens of the world. The origin of goods became secondary and geographic distance is no longer a barrier for many services to happen. Let’s dig deeper.

The Engine of Globalization – An Economic Example

The most visible impacts of globalization are definitely the ones affecting the economic world. Globalization has led to a sharp increase in trade and economic exchanges, but also to a multiplication of financial exchanges.

In the 1970s world economies opened up and the development of free trade policies accelerated the globalization phenomenon. Between 1950 and 2010, world exports increased 33-fold. This significantly contributed to increasing the interactions between different regions of the world.

This acceleration of economic exchanges has led to strong global economic growth. It fostered as well a rapid global industrial development that allowed the rapid development of many of the technologies and commodities we have available nowadays.

Knowledge became easily shared and international cooperation among the brightest minds speeded things up. According to some analysts, globalization has also contributed to improving global economic conditions, creating much economic wealth (thas was, nevertheless, unequally distributed – more information ahead).

Globalization Benefits – A Financial Example

At the same time, finance also became globalized. From the 1980s, driven by neo-liberal policies, the world of finance gradually opened. Many states, particularly the US under Ronald Reagan and the UK under Margaret Thatcher introduced the famous “3D Policy”: Disintermediation, Decommissioning, Deregulation.

The idea was to simplify finance regulations, eliminate mediators and break down the barriers between the world’s financial centers. And the goal was to make it easier to exchange capital between the world’s financial players. This financial globalization has contributed to the rise of a global financial market in which contracts and capital exchanges have multiplied.

Globalization – A Cultural Example

Together with economic and financial globalization, there has obviously also been cultural globalization. Indeed, the multiplication of economic and financial exchanges has been followed by an increase in human exchanges such as migration, expatriation or traveling. These human exchanges have contributed to the development of cultural exchanges. This means that different customs and habits shared among local communities have been shared among communities that (used to) have different procedures and even different beliefs.

Good examples of cultural globalization are, for instance, the trading of commodities such as coffee or avocados. Coffee is said to be originally from Ethiopia and consumed in the Arabid region. Nonetheless, due to commercial trades after the 11th century, it is nowadays known as a globally consumed commodity. Avocados , for instance, grown mostly under the tropical temperatures of Mexico, the Dominican Republic or Peru. They started by being produced in small quantities to supply the local populations but today guacamole or avocado toasts are common in meals all over the world.

At the same time, books, movies, and music are now instantaneously available all around the world thanks to the development of the digital world and the power of the internet. These are perhaps the greatest contributors to the speed at which cultural exchanges and globalization are happening. There are also other examples of globalization regarding traditions like Black Friday in the US , the Brazilian Carnival or the Indian Holi Festival. They all were originally created following their countries’ local traditions and beliefs but as the world got to know them, they are now common traditions in other countries too.

Why Is Globalization Bad? The Negative Effects of Globalization

Globalization is a complex phenomenon. As such, it has a considerable influence on several areas of contemporary societies. Let’s take a look at some of the main negative effects globalization has had so far.

The Negative Effects of Globalization on Cultural Loss

Apart from all the benefits globalization has had on allowing cultural exchanges it also homogenized the world’s cultures. That’s why specific cultural characteristics from some countries are disappearing. From languages to traditions or even specific industries. That’s why according to UNESCO , the mix between the benefits of globalization and the protection of local culture’s uniqueness requires a careful approach.

The Economic Negative Effects of Globalization

Despite its benefits, the economic growth driven by globalization has not been done without awakening criticism. The consequences of globalization are far from homogeneous: income inequalities, disproportional wealth and trades that benefit parties differently. In the end, one of the criticisms is that some actors (countries, companies, individuals) benefit more from the phenomena of globalization, while others are sometimes perceived as the “losers” of globalization. As a matter of fact, a recent report from Oxfam says that 82% of the world’s generated wealth goes to 1% of the population.

• Related: Globally, Business And Government Lack Trust, A New Survey Shows

The Negative Effects of Globalization on the Environment

At the same time, global economic growth and industrial productivity are both the driving force and the major consequences of globalization. They also have big environmental consequences as they contribute to the depletion of natural resources, deforestation and the destruction of ecosystems and loss of biodiversity . The worldwide distribution of goods is also creating a big garbage problem, especially on what concerns plastic pollution .

• How Air Pollution And Diabetes Kill Millions Every Year
• Changing Aircrafts’ Altitude To Reduce The Climatic Impact Of Contrails
• Are Avocados Truly Sustainable?

Globalization, Sustainable Development, and CSR

Globalization affects all sectors of activity to a greater or lesser extent. By doing so, its gap with issues that have to do with  sustainable development  and  corporate social responsibility  is short.

By promoting large-scale industrial production and the globalized circulation of goods, globalization is sometimes opposed to concepts such as resource savings, energy savings or the limitation of greenhouse gases . As a result, critics of globalization often argue that it contributes to accelerating climate change and that it does not respect the principles of ecology. At the same time, big companies that don’t give local jobs and choose instead to use the manpower of countries with low wages (to have lower costs) or pay taxes in countries with more favorable regulations is also opposed to the criteria of a CSR approach. Moreover, the ideologies of economic growth and the constant pursuit of productivity that come along with globalization, also make it difficult to design a sustainable economy based on  resilience .

On the other hand, globalization is also needed for the transitioning to a more sustainable world, since only a global synergy would really be able to allow a real ecological transition. Issues such as global warming indeed require a coordinated response from all global players: fight against CO2 emissions, reduction of waste, a transition to renewable energies . The same goes for ocean or air pollution, or ocean acidification, problems that can’t be solved without global action. The dissemination of green ideas also depends on the ability of committed actors to make them heard globally.

• What Are The Benefits Of Having A Network Of CSR Ambassadors?
• 5 Tips For Organizations To Develop Their CSR Strategy In 2020
• Top 10 Companies With The Best Corporate (CSR) Reputation In 2020

The Road From Globalization to Regionalization

Regionalization can also be analyzed from a corporate perspective. For instance, businesses such as McDonald’s or Starbucks don’t sell exactly the same products everywhere. In some specific stores, they consider people’s regional habits. That’s why the McChicken isn’t sold in India, whereas in Portugal there’s a steak sandwich menu like the ones you can get in a typical Portuguese restaurant.

Politically speaking, when left-wing parties are in power they tend to focus on their country’s people, goods and services. Exchanges with the outside world aren’t seen as very valuable and importations are often left aside.

• Related: Why Is It Important To Support Local And Small Businesses?

Globalization Quotes by World Influencers

Many world leaders, decision-makers and influential people have spoken about globalization. Some stand out its positive benefits and others focus deeper on its negative effects. Find below some of the most interesting quotes on this issue.

Politic Globalization Quotes

Globalization quote by the former U.S President Bill Clinton ??

No generation has had the opportunity, as we now have, to build a global economy that leaves no-one behind. It is a wonderful opportunity, but also a profound responsibility.

Globalization quote by Barack Obama , former U.S. president ??

Globalization is a fact, because of technology, because of an integrated global supply chain, because of changes in transportation. And we’re not going to be able to build a wall around that.

Globalization quote by Dominique Strauss-Kahn, former International Monetary Fund Managing Director ??

“We can’t speak day after day about globalization without at the same time having in mind that…we need multilateral solutions.”

Globalization quote by Stephen Harper , former Prime Minister of Canada ??

“We have to remember we’re in a global economy. The purpose of fiscal stimulus is not simply to sustain activity in our national economies but to help the global economy as well, and that’s why it’s so critical that measures in those packages avoid anything that smacks of protectionism.”

Globalization quote by Julia Gillard , Prime Minister of Australia ??

“My guiding principle is that prosperity can be shared. We can create wealth together. The global economy is not a zero-sum game.”

Other Globalization Quotes

Globalization quote by the spiritual leader Dalai Lama ??

“I find that because of modern technological evolution and our global economy, and as a result of the great increase in population, our world has greatly changed: it has become much smaller. However, our perceptions have not evolved at the same pace; we continue to cling to old national demarcations and the old feelings of ‘us’ and ‘them’.”

The famous German sociologist Ulrich Beck also spoke of globalization ??

“Globalization is not only something that will concern and threaten us in the future, but something that is taking place in the present and to which we must first open our eyes.”

Globalization quote by Bill Gates, owner and former CEO of Microsoft ??

“The fact is that as living standards have risen around the world, world trade has been the mechanism allowing poor countries to increasingly take care of really basic needs, things like vaccination.”

Globalization quote by John Lennon, member of the music band The Beatles ??

Imagine there’s no countries. It isn’t hard to do. Nothing to kill or die for. And no religion, too. Imagine all the people. Living life in peace. You, you may say I’m a dreamer. But I’m not the only one. I hope someday you will join us. And the world will be as one

Home — Essay Samples — Sociology — Globalization

Essays on Globalization

Hook examples for globalization essays, "the global village" metaphor hook.

"In the age of globalization, our world has transformed into a 'global village.' Explore the implications of this metaphor and how it has reshaped our understanding of interconnectedness and cultural exchange."

The Impact of Digital Connectivity Hook

"In an era where a single tweet can reach millions, digital connectivity has revolutionized globalization. Delve into the profound impact of the internet, social media, and technology on global interactions."

The Paradox of Local vs. Global Hook

"Globalization blurs the lines between local and global identities. Analyze the paradox of preserving cultural heritage while embracing the globalized world and how this tension shapes our societies."

The Global Marketplace Hook

"Globalization has ushered in an era of unprecedented trade and economic interconnectedness. Explore the dynamics of the global marketplace, from multinational corporations to supply chains spanning continents."

Cultural Fusion and Identity Hook

"Globalization has led to a melting pot of cultures, but what happens to cultural identities in the process? Investigate how globalization impacts the preservation and evolution of cultural identities."

The Challenges of Globalization Hook

"While globalization offers numerous benefits, it also presents challenges. Examine issues such as income inequality, cultural homogenization, and environmental concerns that arise in a globalized world."

The Future of Globalization Hook

"As we stand on the brink of a globalized future, what can we expect? Join me in exploring the potential trajectories of globalization, from its impact on politics to the role of emerging technologies."

The Best Globalization Essay Topics

• The Impact of Globalization on Local Cultures: Integration or Erasure?
• The Impact of Globalization on Cultural Identity in Anthropological Studies
• Globalization and Economic Inequality: Bridging the Gap Between Rich and Poor
• The Role of Technology in Advancing Globalization and Its Social Implications
• Environmental Consequences of Globalization: Challenges and Sustainable Solutions
• Analyzing the Advantages and Disadvantages of Globalization
• The Influence of Globalization on Education and Cross-Cultural Exchanges
• Global Political Dynamics: How Globalization Affects Sovereignty and Governance
• Globalization and Health: The Spread of Diseases and Global Health Initiatives
• Consumer Culture and Globalization: The Homogenization of Global Markets

Importance of Being Bilingual

Strengths and weaknesses in english, made-to-order essay as fast as you need it.

Each essay is customized to cater to your unique preferences

+ experts online

Importance of Global Interdependence

The effects of globalization on developing countries and its advantages and disadvantages, the impact of globalization to cultural identity, globalization, its causes and effects on the world, let us write you an essay from scratch.

• 450+ experts on 30 subjects ready to help
• Custom essay delivered in as few as 3 hours

Good and Bad Impact of Globalization

History of globalization and its benefits for society, financial, social and political effects of globalization, globalization: global concerns of global development, get a personalized essay in under 3 hours.

Expert-written essays crafted with your exact needs in mind

Globalization's Theories and Effects in The Modern World

The effects of globalization on health and medicine, a study on globalization and its various sides, overview of five articles about globalization, globalization: two sides of the arguments both for and against, globalization and its positive and negative sides for india, the advantages and disadvantages of the globalization process based on real-life examples, criticism and controversial benefits of globalization, globalization: importance of english nowadays, the impact of globalization, nationalism and protectionism on india, an overview of the overall impact of globalization, research of effects of globalization on the media in the world, globalisation as an economical, political and cultural process, pro globalist and anti globalist view from developed country perspective, how global issues impact individual states, electronic commerce in the globalization era, the effect of globalization and americanization on mass media, components of globalization: concept sociocultural and social globalizations, how the impact of globalization on illicit drug trafficking has affected international security, discussion of whether globalization is good or bad for the indian economy.

1. Halliday, T. C., & Osinsky, P. (2006). Globalization of law. Annu. Rev. Sociol., 32, 447-470. (https://www.annualreviews.org/doi/abs/10.1146/annurev.soc.32.061604.123136) 2. Fischer, S. (2003). Globalization and its challenges. American Economic Review, 93(2), 1-30. (https://www.aeaweb.org/articles?id=10.1257/000282803321946750) 3. Lang, M. (2006). Globalization and its history. The Journal of Modern History, 78(4), 899-931. (https://www.journals.uchicago.edu/doi/abs/10.1086/511251?journalCode=jmh) 4. Spring, J. (2008). Research on globalization and education. Review of educational research, 78(2), 330-363. (https://journals.sagepub.com/doi/abs/10.3102/0034654308317846?journalCode=rera) 5. Scott, A., & Storper, M. (2003). Regions, globalization, development. Regional studies, 37(6-7), 579-593. (https://www.tandfonline.com/doi/abs/10.1080/0034340032000108697a) 6. Jameson, F. (1998). Notes on globalization as a philosophical issue. In The cultures of globalization (pp. 54-78). Duke University Press. (https://www.degruyter.com/document/doi/10.1515/9780822378426-005/html?lang=de) 7. Frankel, J. A. (2003). The environment and globalization. (https://www.nber.org/papers/w10090) 8. Teeple, G. (2000). What is globalization?. Globalization and its discontents, 9-23. (https://link.springer.com/chapter/10.1057/9780333981610_2)

Relevant topics

• Sociological Imagination
• Modern Society
• Social Change
• Stereotypes
• Sociological Perspective
• American Identity
• Effects of Social Media
• Cultural Appropriation

By clicking “Check Writers’ Offers”, you agree to our terms of service and privacy policy . We’ll occasionally send you promo and account related email

No need to pay just yet!

Bibliography

We use cookies to personalyze your web-site experience. By continuing we’ll assume you board with our cookie policy .

• Instructions Followed To The Letter
• Deadlines Met At Every Stage
• Unique And Plagiarism Free

You are using an outdated browser. Upgrade your browser today or install Google Chrome Frame to better experience this site.

Pros and cons of economic, social and political globalization: is globalization overall positive for our societies?

Historically, globalization has been considered both a great opportunity and a threat. Globalization is a multifaceted phenomenon which entails several economic, cultural, and political pros and cons. Discover here the implications and arguments for and against globalization.

Brief history of globalization

Globalization is a process of growing exchange, interaction and integration between people, governments and private organizations across the globe. International trade, capital flows, migration , technological transfer and cultural exchanges are some of the typical manifestations of this process. The encounters and relationships between ancient civilizations and the colonization processes initiated during the Age of Discoveries were archaic and early-modern forms of globalization. During the 19th century technological progress and the Industrial Revolution catalyzed globalization. The political and economic international agreements after the Second World War accelerated this process even further. However, this term really became paramount in the academic literature and media after the fall of the Iron Curtain and the Soviet Union which enabled a much more fluid communications, exchanges of goods and services and migration .

For years globalization was equated with progress and economic growth and generally supported. However, in the last few years an increasing number of voices have started to criticize this phenomenon and point at several flaws and dangers associated with it. The anti-globalization movement has grown. Not only left-wing  anti-capitalists oppose globalization, but conservative nationalists have recently emerged as a strong force against it. To what extent is globalization to blame for problems such as national unemployment , inequality, terrorism and cultural homogenization?

Globalization pros and cons

Globalization  is such a complex phenomenon that here we are going to dissect its pros and cons across three different dimensions or angles: economic, cultural and political

Economic globalization 

Economic globalization echoes the views of neoliberal and neoclassicist thinkers in which states lose prominence and the world becomes a single global market of individual consumers. These consumers are characterized by their material and economic self-interest – rather than cultural, civic or other forms of identity. The expansion and dominance of global companies and brands is another key feature. These corporations contribute to deepen global interconnectedness not only by uniformly shaping consumption patterns across societies, but by binding economies together through complex supply chains, trade networks , flows of capital and manpower. 

Pros of economic globalization: 

• Cheaper prices for products and services (more optimized supply chains)
• Better availability of products and services
• Easier access to capital and commodities
• Increased competition
• Producers and retailers can diversify their markets and contribute to economic growth

Cons of economic globalization:

• Some countries struggle to compete
• Extractive behavior of some foreign companies and investors  in resource-rich countries preventing economic diversification
• Strong bargaining power of multinational companies vis-à-vis local governments
• “Contagion effect” is more likely in times of crises
• Problems of “ social dumping ”

Cultural globalization

It refers to the process of transmission of values, ideas, cultural and artistic expressions. In the era of the Internet and fast communications people can interact more easily with each other. Multiculturalism and cosmopolitanism are to some extent manifestations of cultural globalization. Communities are less insulated than ever in history, even those who cannot travel can have today a good understanding of other cultures and meet virtually people from other parts of the world. People change their views and lifestyle influenced by global cultural and consumption trends.

Pros of cultural  globalization:

• Access to new cultural products (art, entertainment, education) 
• Better understanding of foreign values and attitudes. Less stereotyping and fewer misconceptions about other people and cultures
• Instant access to information from anywhere in the world
• Capacity to communicate and defend one’s values and ideals globally
• Customisation or adaptation of global cultural trends to local environment (“mestisage”)

Cons of cultural globalization:

• Spread of commodity-based consumer culture    
• Dangers of cultural homogenization
• Westernization, cultural imperialism or cultural colonialism
• Some small cultures may lose their distinct features
• Dangerous or violent ideals can also spread faster (note the international character of the terror group IS)

Political globalization 

The political dimension is a newer feature of the globalization debate, as over the last 30 years there has been a rise in the influence and power of international and regional institutions such as the European Union (EU), Organization for Economic Cooperation and Development (OECD), the United Nations (UN), the World Trade Organization (WTO), MERCOSUR in South America, and the Association for Southeast Asian Nations (ASEAN). These international and supranational actors increasingly shape domestic politics.

Pros of political globalization:

• Access to international aid and financial support
• It contributes to world peace . It reduces risk of invasions, more checks on big powers and limitationn on nationalism
• International organizations are often committed to spread values like freedom and to fight abuses within countries
• Smaller countries can work together and gain more influence internationally
• Governments can learn from each other

Cons of political globalization:

• State sovereignty is reduced
• The functioning of international and supranational organizations is often not “democratic” in terms of representation and accountability
• Big countries can shape decisions in supranational organizations
• Sometimes countries can veto decisions and slow down decision making processes
• Coordination is difficult and expensive

To summarize, no matter from which angle we look at globalization, whether economic, cultural or political, both the opportunities and drawbacks are numerous.

If you want to promote your own scholarly debate, lecture, research project or academic article, contact us:  university[a]netivist.org

Vote to see result and collect 1 XP. Your vote is anonymous. If you change your mind, you can change your vote simply by clicking on another option.

Voting results

New to netivist?

Join with confidence, netivist is completely advertisement free. You will not receive any promotional materials from third parties.

Or sign in with your favourite Social Network:

Join the debate

In order to join the debate you must be logged in.

Already have an account on netivist? Just login . New to netivist? Create your account for free .

 Report Abuse and Offensive language

Was there any kind of offensive or inappropriate language used in this comment.

If you feel this user's conduct is unappropriate, please report this comment and our moderaters will review its content and deal with this matter as soon as possible.

NOTE: Your account might be penalized should we not find any wrongdoing by this user. Only use this feature if you are certain this user has infringed netivist's Terms of Service .

Our moderators will now review this comment and act accordingly. If it contains abusive or inappropriate language its author will be penalized.

Posting Comment

Your comment is being posted. This might take a few seconds, please wait.

Error Posting Comment

  error.

We are having trouble saving your comment. Please try again .

Most Voted Debates

Start a Debate

Would you like to create a debate and share it with the netivist community? We will help you do it!

Found a technical issue?

Are you experiencing any technical problem with netivist? Please let us know!

Help netivist

Help netivist continue running free!

Please consider making a small donation today. This will allow us to keep netivist alive and available to a wide audience and to keep on introducing new debates and features to improve your experience.

• What is netivist?
• Entertainment
• Top Debates
• Top Campaigns
• Provide Feedback

Follow us on social media:

 Share by Email

There was an error...

Email successfully sent to:

Join with confidence, netivist is completely advertisement free You will not recive any promotional materials from third parties

 Join netivist

Already have a netivist account?

If you already created your netivist account, please log in using the button below.

If you are new to netivist, please create your account for free and start collecting your netivist points!

You just leveled up!

Congrats you just reached a new level on Netivist. Keep up the good work.

Together we can make a difference

Follow us and don't miss out on the latest debates!

• Business Essentials
• Leadership & Management
• Credential of Leadership, Impact, and Management in Business (CLIMB)
• Entrepreneurship & Innovation
• Digital Transformation
• Finance & Accounting
• Business in Society
• For Organizations
• Support Portal
• Media Coverage
• Founding Donors
• Leadership Team

• Harvard Business School →
• HBS Online →
• Business Insights →

Business Insights

Harvard Business School Online's Business Insights Blog provides the career insights you need to achieve your goals and gain confidence in your business skills.

• Career Development
• Communication
• Decision-Making
• Earning Your MBA
• Negotiation
• News & Events
• Productivity
• Staff Spotlight
• Student Profiles
• Work-Life Balance
• AI Essentials for Business
• Alternative Investments
• Business Analytics
• Business Strategy
• Business and Climate Change
• Design Thinking and Innovation
• Digital Marketing Strategy
• Disruptive Strategy
• Economics for Managers
• Entrepreneurship Essentials
• Financial Accounting
• Global Business
• Launching Tech Ventures
• Leadership Principles
• Leadership, Ethics, and Corporate Accountability
• Leading with Finance
• Management Essentials
• Negotiation Mastery
• Organizational Leadership
• Power and Influence for Positive Impact
• Strategy Execution
• Sustainable Business Strategy
• Sustainable Investing
• Winning with Digital Platforms

6 Pros and Cons of Globalization in Business to Consider

• 01 Apr 2021

Throughout history, commerce and business have been limited by certain geographic constraints. In its earliest days, trade happened between neighboring tribes and city-states. As humans domesticated the horse and other animals, the distances they could travel to trade increased. These distances increased further with the development of seafaring capabilities.

Although humans have been using ships for centuries to transport goods, cargo, people, and ideas around the world, it wasn’t until the development of the airplane that the blueprint of a “globalized economy” was laid. This was for a simple reason: You can travel greater distances faster than ever before.

The development of the internet accelerated this process even more, making it easier to communicate and collaborate with others. Today, your international co-worker, business partner, customer, or friend is only a few taps or clicks away.

Globalization has had numerous effects—both positive and negative—on business and society at large. Here’s an overview of the pros and cons of globalization in business.

Access your free e-book today.

What Is Globalization?

Globalization is the increased flow of goods, services, capital, people, and ideas across international boundaries according to the online course Global Business , taught by Harvard Business School Professor Forest Reinhardt.

“We live in an age of globalization,” Reinhardt says in Global Business . “That is, national economies are even more tightly connected with one another than ever before.”

How Globalization Affects Daily Life

Globalization has had a significant impact on various aspects of daily life.

For example, it’s changed the way consumers shop for products and services. Today, 70 percent of Americans shop online. In 2022, there were 268 million digital buyers in the US and by 2025, this number is predicted to reach 285 million.

In addition, the globalized economy has opened up new job markets by making it more feasible to hire overseas workers. This has created a wide range of career opportunities for both job seekers and employers.

The emergence of remote work post-pandemic was also made possible by globalization. According to a survey from WFH Research , only seven percent of paid workdays in the US were remote in 2019. However, this number climbed to 29 percent by January 2024.

Check out the video below to learn more about globalization, and subscribe to our YouTube channel for more explainer content!

Advantages of Globalization

1. economic growth.

It’s widely believed that one of the benefits of globalization is greater economic growth for all parties. There are several reasons why this might be the case, including:

• Access to labor: Globalization gives all nations access to a wider labor pool. Developing nations with a shortage of knowledge workers might, for example, “import” labor to kickstart industry. Wealthier nations, on the other hand, might outsource low-skill work to developing nations with a lower cost of living to reduce the cost of goods sold and pass those savings on to the customer.
• Access to jobs: This point is directly related to labor. Through globalization, developing nations often gain access to jobs in the form of work that’s been outsourced by wealthier nations. While there are potential pitfalls to this (see “Disproportionate Growth” below), this work can significantly contribute to the local economy.
• Access to resources: One of the primary reasons nations trade is to gain access to resources they otherwise wouldn’t have. Without this flow of resources across borders, many modern luxuries would be impossible to manufacture or produce. Smartphones, for example, are dependent on rare earth metals found in limited areas around the world.
• The ability for nations to “specialize”: Global and regional cooperation allow nations to heavily lean into their economic strengths, knowing they can trade products for other resources. An example is a tropical nation that specializes in exporting a certain fruit. It’s been shown that when nations specialize in the production of goods or services in which they have an advantage, trade benefits both parties.

2. Increased Global Cooperation

For a globalized economy to exist, nations must be willing to put their differences aside and work together. Therefore, increased globalization has been linked to a reduction—though not an elimination—of conflict.

“Of course, as long as there have been nations, they've been connected with each other through the exchange of lethal force—through war and conquest—and this threat has never gone away,” Reinhardt says in Global Business . “The conventional wisdom has been that the increased intensity of these other flows—goods, services, capital, people, and so on—have reduced the probability that the world's nations will fall back into the catastrophe of war.”

3. Increased Cross-Border Investment

According to the course Global Business , globalization has led to an increase in cross-border investment. At the macroeconomic level, this international investment has been shown to enhance welfare on both sides of the equation.

The country that’s the source of the capital benefits because it can often earn a higher return abroad than domestically. The country that receives the inflow of capital benefits because that capital contributes to investment and, therefore, to productivity. Foreign investment also often comes with, or in the form of, technology, know-how, or access to distribution channels that can help the recipient nation.

Disadvantages of Globalization

1. increased competition.

When viewed as a whole, global free trade is beneficial to the entire system. Individual companies, organizations, and workers can be disadvantaged, however, by global competition. This is similar to how these parties might be disadvantaged by domestic competition: The pool has simply widened.

With this in mind, some firms, industries, and citizens may elect governments to pursue protectionist policies designed to buffer domestic firms or workers from foreign competition. Protectionism often takes the form of tariffs, quotas, or non-tariff barriers, such as quality or sanitation requirements that make it more difficult for a competing nation or business to justify doing business in the country. These efforts can often be detrimental to the overall economic performance of both parties.

“Although we live in an age of globalization, we also seem to be living in an age of anti-globalization,” Reinhardt says in Global Business . “Dissatisfaction with the results of freer trade, concern about foreign investment, and polarized views about immigration all seem to be playing important roles in rich-country politics in the United States and Europe. The threats in Western democracy to the post-war globalist consensus have never been stronger.”

2. Disproportionate Growth

Another issue of globalization is that it can introduce disproportionate growth both between and within nations. These effects must be carefully managed economically and morally.

Within countries, globalization often has the effect of increasing immigration. Macroeconomically, immigration increases gross domestic product (GDP), which can be an economic boon to the recipient nation. Immigration may, however, reduce GDP per capita in the short run if immigrants’ income is lower than the average income of those already living in the country.

Additionally, as with competition, immigration can benefit the country as a whole while imposing costs on people who may want their government to restrict immigration to protect them from those costs. These sentiments are often tied to and motivated—at least in part—by racism and xenophobia.

“Meanwhile, outside the rich world, hundreds of millions of people remain mired in poverty,” Reinhardt says in Global Business. “We don't seem to be able to agree about whether this is because of too much globalization or not enough.”

3. Environmental Concerns

Increased globalization has been linked to various environmental challenges, many of which are serious, including:

• Deforestation and loss of biodiversity caused by economic specialization and infrastructure development
• Greenhouse gas emissions and other forms of pollution caused by increased transportation of goods
• The introduction of potentially invasive species into new environments

While such issues are governed by existing or proposed laws and regulations, businesses have made climate change concerns and sustainability a priority by, for example, embracing the tenets of the triple bottom line and the idea of corporate social responsibility .

Managing the Risks of Globalization

The world is never going to abandon globalization. While it’s true that individual countries and regions put policies and practices in place that limit globalization, such as tariffs, it’s here to stay. The good news is that businesses and professionals willing to prepare for globalization’s challenges by developing strong social impact skills have the potential to benefit immensely.

Whether you’re a business owner, member of executive leadership, or an employee, understanding the impacts of globalization and how to identify its opportunities and risks can help you become more effective in your role and drive value for your organization.

Taking a course like Global Business is one path toward developing international business skills and gaining an understanding of the macroeconomic, political , and social conditions that continue to impact globalization.

Are you interested in breaking into a global market? Sharpen your knowledge of the international business world with Global Business , one of our online business in society courses . If you aren't sure which course is the right fit, download our free course flowchart .

This post was updated on February 26, 2024. It was originally published on April 15, 2021.

About the Author

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

The State of Globalization in 2021

• Steven A. Altman
• Caroline R. Bastian

Trade, capital, and information flows have stabilized, recovered, and even grown in the past year.

As the coronavirus swept the world, closing borders and halting international trade and capital flows, there were questions about the pandemic’s lasting impact on globalization. But a close look at the recent data paints a much more optimistic picture. While international travel remains significantly down and is not expected to rebound until 2023, cross-border trade, capital, and information flows have largely stabilized, recovered, or even grown over the last year. The bottom line for business is that Covid-19 has not knocked globalization down to anywhere close to what would be required for strategists to narrow their focus to their home countries or regions.

Cross-border flows plummeted in 2020 as the Covid-19 pandemic swept the world, reinforcing doubts about the future of globalization. As we move into 2021, the latest data paint a clearer — and more hopeful — picture. Global business is not going away, but the landscape is shifting, with important implications for strategy and management.

• Steven A. Altman is a senior research scholar, adjunct assistant professor, and director of the DHL Initiative on Globalization at the NYU Stern Center for the Future of Management .
• CB Caroline R. Bastian is a research scholar at the DHL Initiative on Globalization.

Partner Center

Effects of Economic Globalization

Globalization has led to increases in standards of living around the world, but not all of its effects are positive for everyone.

Social Studies, Economics, World History

Bangladesh Garment Workers

The garment industry in Bangladesh makes clothes that are then shipped out across the world. It employs as many as four million people, but the average worker earns less in a month than a U.S. worker earns in a day.

Photograph by Mushfiqul Alam

Put simply, globalization is the connection of different parts of the world. In economics, globalization can be defined as the process in which businesses, organizations, and countries begin operating on an international scale. Globalization is most often used in an economic context, but it also affects and is affected by politics and culture. In general, globalization has been shown to increase the standard of living in developing countries, but some analysts warn that globalization can have a negative effect on local or emerging economies and individual workers. A Historical View Globalization is not new. Since the start of civilization, people have traded goods with their neighbors. As cultures advanced, they were able to travel farther afield to trade their own goods for desirable products found elsewhere. The Silk Road, an ancient network of trade routes used between Europe, North Africa, East Africa, Central Asia, South Asia, and the Far East, is an example of early globalization. For more than 1,500 years, Europeans traded glass and manufactured goods for Chinese silk and spices, contributing to a global economy in which both Europe and Asia became accustomed to goods from far away. Following the European exploration of the New World, globalization occurred on a grand scale; the widespread transfer of plants, animals, foods, cultures, and ideas became known as the Columbian Exchange. The Triangular Trade network in which ships carried manufactured goods from Europe to Africa, enslaved Africans to the Americas, and raw materials back to Europe is another example of globalization. The resulting spread of slavery demonstrates that globalization can hurt people just as easily as it can connect people. The rate of globalization has increased in recent years, a result of rapid advancements in communication and transportation. Advances in communication enable businesses to identify opportunities for investment. At the same time, innovations in information technology enable immediate communication and the rapid transfer of financial assets across national borders. Improved fiscal policies within countries and international trade agreements between them also facilitate globalization. Political and economic stability facilitate globalization as well. The relative instability of many African nations is cited by experts as one of the reasons why Africa has not benefited from globalization as much as countries in Asia and Latin America. Benefits of Globalization Globalization provides businesses with a competitive advantage by allowing them to source raw materials where they are inexpensive. Globalization also gives organizations the opportunity to take advantage of lower labor costs in developing countries, while leveraging the technical expertise and experience of more developed economies. With globalization, different parts of a product may be made in different regions of the world. Globalization has long been used by the automotive industry , for instance, where different parts of a car may be manufactured in different countries. Businesses in several different countries may be involved in producing even seemingly simple products such as cotton T-shirts. Globalization affects services, too. Many businesses located in the United States have outsourced their call centers or information technology services to companies in India. As part of the North American Free Trade Agreement (NAFTA), U.S. automobile companies relocated their operations to Mexico, where labor costs are lower. The result is more jobs in countries where jobs are needed, which can have a positive effect on the national economy and result in a higher standard of living. China is a prime example of a country that has benefited immensely from globalization. Another example is Vietnam, where globalization has contributed to an increase in the prices for rice, lifting many poor rice farmers out of poverty. As the standard of living increased, more children of poor families left work and attended school. Consumers benefit also. In general, globalization decreases the cost of manufacturing . This means that companies can offer goods at a lower price to consumers. The average cost of goods is a key aspect that contributes to increases in the standard of living. Consumers also have access to a wider variety of goods. In some cases, this may contribute to improved health by enabling a more varied and healthier diet; in others, it is blamed for increases in unhealthy food consumption and diabetes. Downsides Not everything about globalization is beneficial. Any change has winners and losers, and the people living in communities that had been dependent on jobs outsourced elsewhere often suffer. Effectively, this means that workers in the developed world must compete with lower-cost markets for jobs; unions and workers may be unable to defend against the threat of corporations that offer the alternative between lower pay or losing jobs to a supplier in a less expensive labor market. The situation is more complex in the developing world, where economies are undergoing rapid change. Indeed, the working conditions of people at some points in the supply chain are deplorable. The garment industry in Bangladesh, for instance, employs an estimated four million people, but the average worker earns less in a month than a U.S. worker earns in a day. In 2013, a textile factory building collapsed, killing more than 1,100 workers. Critics also suggest that employment opportunities for children in poor countries may increase negative impacts of child labor and lure children of poor families away from school. In general, critics blame the pressures of globalization for encouraging an environment that exploits workers in countries that do not offer sufficient protections. Studies also suggest that globalization may contribute to income disparity and inequality between the more educated and less educated members of a society. This means that unskilled workers may be affected by declining wages, which are under constant pressure from globalization. Into the Future Regardless of the downsides, globalization is here to stay. The result is a smaller, more connected world. Socially, globalization has facilitated the exchange of ideas and cultures, contributing to a world view in which people are more open and tolerant of one another.

Articles & Profiles

Media credits.

The audio, illustrations, photos, and videos are credited beneath the media asset, except for promotional images, which generally link to another page that contains the media credit. The Rights Holder for media is the person or group credited.

Production Managers

Program specialists, last updated.

February 20, 2024

User Permissions

For information on user permissions, please read our Terms of Service. If you have questions about how to cite anything on our website in your project or classroom presentation, please contact your teacher. They will best know the preferred format. When you reach out to them, you will need the page title, URL, and the date you accessed the resource.

If a media asset is downloadable, a download button appears in the corner of the media viewer. If no button appears, you cannot download or save the media.

Text on this page is printable and can be used according to our Terms of Service .

Interactives

Any interactives on this page can only be played while you are visiting our website. You cannot download interactives.

Related Resources

30 Globalization Pros and Cons

Definition: Globalization refers to the increasing global interconnectedness of nations. It it not only economic integration. It also refers to cultural , technological , social , and political integration (Dincer et al., 2018). A good catch-all definition comes from Hodos (2016), who writes: “Globalization is defined as the process of becoming globally connected.”

Globalization Pros and Cons

The advantages of globalization, 1. increased economic growth.

Globalization facilitates technology, knowledge, and goods transfer, which in turn boosts economic growth (Erixon, 2018).

Through globalization, countries can now purchase the newest technologies and import the most productive machinery from other countries.

This means every country now has access to the most productive machineries, making the whole world more productive. Productivity means more output, which means more economic growth.

2. Cultural exchange and diversity

Globalization facilitates cultural exchange and diversity by increasing interactions among people from different parts of the world through trade, travel, and communication.

This exposure leads to the sharing of ideas, traditions, languages, and values across borders, enriching the cultural landscape of participating societies.

Such interactions often lead to the fusion of cuisines, music, art, and fashion, creating new, hybrid forms of cultural expression.

3. Improvement in global communication

Globalization is both caused by and a catalyst for the expansion of global technology and telecommunications. For example, the internet helps facilitate global trade, and demand for a fast and reliable global internet has stimulated its technological development.

The resulting interconnectedness allows for real-time communication across different countries, breaking down geographical and temporal barriers. The result is a more integrated world where cultural and professional exchanges occur more seamlessly.

4. Greater access to foreign investment

Globalization leads to greater access to foreign investment. With broken-down financial barriers, businesses can now source overseas investors for funds. This helps push down the cost of investment and stimulate local business (Erixon, 2018).

It’s also good for investors. They can diversify their portfolios by investing in different countries, and developing countries can benefit from foreign capital to fund growth and development projects.

This influx of foreign investment can lead to economic growth, technological advancements, and increased employment opportunities in the recipient countries.

5. Access to new markets for businesses

200 years ago, everyday small businesspeople could generally only trade with nearby communities. They had to get goods to market via horse and cart and anything perishable had to be consumed fast. There were no refigerators!

Today, with global supply chains, refrigerators, and free trade agreements, even small businesspeople have access to global markets.

Companies can therefore expand their operations and customer base beyond their domestic markets, tapping into demand in different countries (Erixon, 2018).

6. Increased migration opportunities

Globalization has opened up global labor markets. Nowadays, it takes less than 24 hours to move anywhere across the world. No more 3-month boat rides! This has allowed highly-skilled professionals to cross the world and get jobs exactly where there is market demand.

This mobility benefits migrants through better opportunities, the companies by linking them up with the best possible employees, and also contributes to the cultural and economic dynamism of the host countries (Dumont, Rayp & Willemé, 2012).

7. Reduction in prices of goods and services

Globalization leads to a reduction in prices of goods and services by allowing countries to specialize in producing goods where they have a comparative advantage, leading to more efficient production and lower costs (Mir, Hassan & Qadri, 2014).

The removal of trade barriers and the increased competition in global markets drive down prices, making products more affordable for consumers (Erixon, 2018).

Additionally, the global supply chain means consumers have access to a wider variety of goods and services from different parts of the world.

8. Increased competition leading to innovation

Globalization leads to increased competition because you’re no longer just competing with Bob down the road. Businesses are now competing with other businesses from the other side of the world (Erixon, 2018).

While at first this competition sounds bad, it tends to have positive effects. For example, it spurs innovation as companies strive to maintain their competitive edge in a global market.

The exposure to different market needs and technological advancements across borders encourages businesses to innovate and improve their products and services.

This competition not only drives technological advancement but also leads to better quality and diverse options for consumers.

9. Opportunity for developing countries to develop faster

Developing countries need foreign investment and access to foreign markets in order to grow. Globalization provides this access (Mir, Hassan & Qadri, 2014).

This exposure to global markets and capital can accelerate economic growth, create jobs, and promote infrastructure development.

Furthermore, the exchange of knowledge and best practices with developed nations can enhance the skills and capacities of the workforce in developing countries, leading to sustainable development.

10. Spread of democratic values

Some argue that globalization has led to the spread of democratic values. Arjun Appadurai calls this the “ideoscape” of globalization.

The global spread of media and the internet allows for the rapid dissemination of democratic ideals and human rights concepts.

We saw this, for example, during the Arab Spring of 2011, where activist groups multiple countries in the Arab world collaborated via social media to demand democratic reforms.

11. Global talent pool for employment

Globalization leads to a global talent pool for employment as businesses and organizations have access to a wider range of skills and expertise from around the world (Dumont, Rayp & Willemé, 2012).

Enhanced mobility and interconnectedness allow employers to recruit talent from different countries, enabling them to meet specific skill requirements more effectively.

This global workforce diversifies the workplace, fosters innovation, and enhances competitiveness by bringing together diverse perspectives and experiences.

12. Enhanced opportunities for high-skilled workers

Globalization leads to enhanced opportunities for high-skilled workers as it opens up a vast array of international job opportunities in various sectors, including technology, finance, and healthcare (Dumont, Rayp & Willemé, 2012).

These workers can leverage their specialized skills in a broader market, often finding better employment prospects, higher salaries, and advanced career development options globally.

Moreover, the exchange of expertise and knowledge across borders contributes to professional growth and the advancement of specialized fields.

13. Enhanced global cooperation and peace

Globalization could also, in an optimistic scenario, lead to enhanced global cooperation and peace. This is based on the theory that increasing economic interdependence among nations encourages diplomatic relations and collaboration rather than war (Baldwin, 2008).

The shared interests in maintaining stable trade and investment environments promote peaceful interactions and reduce the likelihood of conflicts.

Furthermore, international institutions and agreements foster a platform for dialogue and conflict resolution, contributing to global stability and peace.

14. Widening networking opportunities

Globalization leads to widening networking opportunities as it connects people from different cultures and professional backgrounds through international business, education, and social media platforms.

These connections facilitate the exchange of ideas, collaboration on projects, and the formation of global communities with shared interests and goals.

This extensive networking can lead to new business opportunities, partnerships, and innovations, benefiting individuals and organizations alike (Dumont, Rayp & Willemé, 2012).

15. Access to more goods for consumers

Globalization leads to access to more goods for consumers by breaking down trade barriers and enabling the efficient flow of products across borders (Mir, Hassan & Qadri, 2014).

Amazon Canada doesn’t have the product? No problem, try Amazon UK instead!

This results in a wider variety of goods available in the market, often at lower prices due to increased competition and economies of scale in production.

Consumers benefit from the improved quality, variety, and affordability of products, enhancing their purchasing choices and overall quality of life.

Disadvantages of Globalization

1. widening of economic disparities.

While the above positives sound good, many like Naomi Klein argue that globalization can lead to the widening of economic disparities as it often benefits developed nations and those with competitive advantages, while less developed countries may struggle to keep up.

This can result in increased wealth for certain regions and sectors, while others may experience stagnation or decline in economic growth. The result is a growing gap between the rich and the poor, both within and between countries.

2. Cultural Homogenization (Loss of local cultures)

There is an argument that globalization can lead to the loss of local cultures and identities as global brands and Western media dominate, overshadowing local traditions, languages, and practices.

We call this ‘ cultural homogenization ‘.

The spread of a homogenized global culture can dilute the uniqueness of local cultures, leading to a decrease in cultural diversity. People may adopt global trends at the expense of traditional values and customs, leading to a loss of cultural heritage.

Others dispute this claim, arguing instead that globalization leads to a process called glocalization .

3. Exploitation of labor in developing countries

Globalization can lead to the exploitation of labor in developing countries (Sharma, 2014). Multinational companies may seek to minimize costs by relocating production to regions where labor is cheaper and regulations are less stringent (e.g. opening up factories in Mexico and China instead of midwestern USA).

This can result in poor working conditions, low wages, and a lack of labor rights, exploiting the workforce in these countries. The pursuit of profit by global corporations can overshadow the need for ethical labor practices, leading to exploitation.

4. Environmental degradation

Environmentalists are often concerned that globalization is exacerbating environmental degradation. Increased industrial activity and international transportation contribute to pollution and natural resource depletion (Mir, Hassan & Qadri, 2014).

The global demand for goods encourages mass production, often without adequate environmental safeguards, leading to habitat destruction, loss of biodiversity, and climate change.

The focus on economic growth and consumerism can overshadow the need for sustainable environmental practices, exacerbating global environmental challenges.

5. Increased risk of financial contagion

Globalization leads to an increased risk of financial contagion as economies become more interconnected, meaning that financial crises can quickly spread from one country to another (Mendoza & Quadrini, 2010; Mir, Hassan & Qadri, 2014).

This interdependence is due to global investment and the intertwined nature of banking and financial markets.

A financial problem in one country can lead to investor panic and a loss of confidence, triggering a domino effect that impacts economies worldwide.

6. Over-dependence on global markets

Globalization leads to concerns that countries are over-dependent on foreign markets for essential supplies.

This dependence can make economies vulnerable when supply chains break down. When a major global shock occurs, countries heavily reliant on that market for exports or investment can experience significant economic disruptions (Mendoza & Quadrini, 2010).

For example, most nations in the world are reliant on Taiwan for computer chips. If Taiwan were suddenly invaded by China, the rest of the world won’t be able to produce sufficient computers!

7. Threat to local businesses and industries

In a globalized marketplace, local businesses face intense competition from larger multinational corporations.

These multinationals often have greater resources, technology, and access to larger markets, which can overshadow local enterprises (Burlacu, Gutu & Matei, 2018).

This intense competition can lead to the closure of local businesses, loss of traditional industries, and a decrease in domestic job opportunities.

8. Erosion of national sovereignty

National sovereignty is threatened by a globalized world. Governments may be compelled to alter their policies and regulations to attract global investment and remain competitive in the international market, locking themselves into international trade agreements that require compromise and cooperation (Burlacu, Gutu & Matei, 2018).

This can result in countries losing control over their economic, social, and environmental policies, potentially prioritizing international interests over national priorities.

9. Downward pressure on wages

Globalization can lead to downward pressure on wages as businesses seek to reduce costs by outsourcing jobs to countries where labor is cheaper (Mir, Hassan & Qadri, 2014).

This competition for lower-cost labor markets can result in wage stagnation or decreases in higher-wage countries.

Additionally, the influx of workers willing to accept lower wages can suppress wage growth even in sectors not directly exposed to international competition.

10. Spread of Political Ideologies

While earlier I noted that globalization may have sped up the spread of democracy, the opposite may occur.

While democracy may have been promoted by globalization – especially in the 20th Century – the same could happen with anti-democratic ideologies . For example, recently we have seen the spread of authoritarianism and “illiberal democracy” across the world.

11. Brain drain in developing countries

Globalization leads to brain drain in developing countries as highly educated and skilled professionals migrate to developed countries in search of better job opportunities, salaries, and living conditions (Dumont, Rayp & Willemé, 2012).

This migration of talent results in a significant loss of skilled labor for the originating countries, impacting their development and economic growth.

The departure of these key individuals can also lead to a shortage of expertise necessary for local advancement and innovation.

12. Spread of diseases across borders

Globalization leads to the spread of diseases across borders as increased international travel and trade facilitate the rapid movement of people and goods around the world.

This mobility can enable pathogens to cross geographical boundaries more easily, leading to the faster spread of infectious diseases.

Outbreaks that might have been contained within a region in the past can now quickly escalate into global health emergencies.

13. Vulnerability to global economic fluctuations

A globalized nation may be vulnerable to global economic fluctuations as economies become increasingly interconnected through trade, investment, and financial markets (Mendoza & Quadrini, 2010).

This interconnectedness means that economic issues in one country or region can have ripple effects globally, impacting economies that might not be directly related to the initial problem.

As a result, even local economies can be significantly affected by economic downturns or crises occurring in distant markets.

14. Concentration of corporate power

Some argue that globalization leads to the concentration of corporate power as large multinational corporations expand their reach and influence across multiple countries (Cowling & Tomlinson, 2005).

These corporations can dominate markets, overshadowing smaller local businesses and potentially manipulating markets to their advantage.

This concentration of power can lead to reduced competition, influence over political and economic policies, and an unequal distribution of economic benefits.

15. Potential for global monopolies and oligopolies

Similarly, globalization could lead to the potential for global monopolies and oligopolies as dominant corporations expand their reach across international borders (Burlacu, Gutu & Matei, 2018).

These entities can gain excessive market control, limiting competition and potentially leading to higher prices and fewer choices for consumers.

The global scale of these companies makes it challenging for new entrants to compete, and their influence can extend to shaping market regulations and policies in their favor.

Baldwin, R. (2008). EU institutional reform: Evidence on globalization and international cooperation. American Economic Review, 98(2), 127-132.

Burlacu, S., Gutu, C., & Matei, F. O. (2018). Globalization–pros and cons.  Calitatea ,  19 (S1), 122-125.

Cowling, K., & Tomlinson, P. R. (2005). Globalisation and corporate power .  Contributions to Political Economy ,  24 (1), 33-54.

Dincer, H., Yüksel, S., & Hacioglu, Ü. (Eds.). (2018). Strategic Design and Innovative Thinking in Business Operations: The Role of Business Culture and Risk Management . Springer International Publishing.

Dumont, M., Rayp, G., & Willemé, P. (2012). The bargaining position of low-skilled and high-skilled workers in a globalising world .  Labour Economics ,  19 (3), 312-319.

Erixon, F. (2018). The economic benefits of globalization for business and consumers.  European Centre for International Political Economy .

Hodos, T. (Ed.). (2016). The Routledge Handbook of Archaeology and Globalization. Taylor & Francis.

Mendoza, E. G., & Quadrini, V. (2010). Financial globalization, financial crises and contagion .  Journal of monetary economics ,  57 (1), 24-39.

Mir, U. R., Hassan, S. M., & Qadri, M. M. (2014). Understanding globalization and its future: An analysis.  Pakistan Journal of Social Sciences ,  34 (2), 607-624.

Sharma, N. K. (2013). Globalization and its impact on the third world economy.  Crossing the Border: International Journal of Interdisciplinary Studies ,  1 (1), 21-28.

Chris Drew (PhD)

Dr. Chris Drew is the founder of the Helpful Professor. He holds a PhD in education and has published over 20 articles in scholarly journals. He is the former editor of the Journal of Learning Development in Higher Education. [Image Descriptor: Photo of Chris]

• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ What is Educational Psychology?
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ What is IQ? (Intelligence Quotient)
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 5 Top Tips for Succeeding at University
• Chris Drew (PhD) https://helpfulprofessor.com/author/chris-drew-phd/ 50 Durable Goods Examples

Leave a Comment Cancel Reply

Your email address will not be published. Required fields are marked *

Essay on Globalization for Students and Children

500+ words essay on globalization.

Globalization refers to integration between people, companies, and governments. Most noteworthy, this integration occurs on a global scale. Furthermore, it is the process of expanding the business all over the world. In Globalization, many businesses expand globally and assume an international image. Consequently, there is a requirement for huge investment to develop international companies.

How Globalization Came into Existence?

First of all, people have been trading goods since civilization began. In the 1st century BC, there was the transportation of goods from China to Europe. The goods transportation took place along the Silk Road. The Silk Road route was very long in distance. This was a remarkable development in the history of Globalization. This is because, for the first time ever, goods were sold across continents.

Globalization kept on growing gradually since 1st BC. Another significant development took place in the 7th century AD. This was the time when the religion of Islam spread. Most noteworthy, Arab merchants led to a rapid expansion of international trade . By the 9th century, there was the domination of Muslim traders on international trade. Furthermore, the focus of trade at this time was spices.

True Global trade began in the Age of Discovery in the 15th century. The Eastern and Western continents were connected by European merchants. There was the discovery of America in this period. Consequently, global trade reached America from Europe.

From the 19th century, there was a domination of Great Britain all over the world. There was a rapid spread of international trade. The British developed powerful ships and trains. Consequently, the speed of transportation greatly increased. The rate of production of goods also significantly increased. Communication also got faster which was better for Global trade .

Finally, in 20th and 21st -Century Globalization took its ultimate form. Above all, the development of technology and the internet took place. This was a massive aid for Globalization. Hence, E-commerce plays a huge role in Globalization.

Get the huge list of more than 500 Essay Topics and Ideas

Impact of Globalization

First of all, Foreign Direct Investment (FDI) increases at a great rate. This certainly is a huge contribution of Globalization. Due to FDI, there is industrial development. Furthermore, there is the growth of global companies. Also, many third world countries would also benefit from FDI.

Technological Innovation is another notable contribution of Globalization. Most noteworthy, there is a huge emphasis on technology development in Globalization. Furthermore, there is also technology transfer due to Globalization. The technology would certainly benefit the common people.

The quality of products improves due to Globalization. This is because manufacturers try to make products of high-quality. This is due to the pressure of intense competition. If the product is inferior, people can easily switch to another high-quality product.

To sum it up, Globalization is a very visible phenomenon currently. Most noteworthy, it is continuously increasing. Above all, it is a great blessing to trade. This is because it brings a lot of economic and social benefits to it.

Customize your course in 30 seconds

Which class are you in.

• Travelling Essay
• Picnic Essay
• Our Country Essay
• My Parents Essay
• Essay on Favourite Personality
• Essay on Memorable Day of My Life
• Essay on Knowledge is Power
• Essay on Gurpurab
• Essay on My Favourite Season
• Essay on Types of Sports

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Download the App

• Search Search Please fill out this field.

What Is Globalization?

Understanding globalization, the history of globalization.

• Globalization FAQs

The Bottom Line

• Macroeconomics

Globalization in Business With History and Pros and Cons

Globalization refers to the spread of the flow of financial products, goods, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of nations around the globe fostered through free trade .

Key Takeaways

• Globalization is the spread of products, technology, information, and jobs across nations.
• Corporations in developed nations can gain a competitive edge through globalization.
• Developing countries also benefit through globalization as they tend to be more cost-effective and therefore attract jobs.
• The benefits of globalization have been questioned as the positive effects are not necessarily distributed equally.
• One clear result of globalization is that an economic downturn in one country can create a domino effect through its trade partners.

Alex Dos Diaz / Investopedia

Corporations gain a competitive advantage on multiple fronts through globalization. They can reduce operating costs by manufacturing abroad, buy raw materials more cheaply because of the reduction or removal of tariffs , and most of all, they gain access to millions of new consumers.

Globalization is a social, cultural, political, and legal phenomenon. 

• Socially, it leads to greater interaction among various populations.
• Culturally, globalization represents the exchange of ideas, values, and artistic expression among cultures.
• Globalization also represents a trend toward the development of a single world culture. 
• Politically, globalization has shifted attention to intergovernmental organizations like the United Nations (UN) and the World Trade Organization (WTO).
• Legally, globalization has altered how international law is created and enforced.

On one hand, globalization has created new jobs and economic growth through the cross-border flow of goods, capital, and labor. On the other hand, this growth and job creation are not distributed evenly across industries or countries.

Specific industries in certain countries, such as textile manufacturing in the U.S. or corn farming in Mexico, have suffered severe disruption or outright collapse as a result of increased international competition.

Globalization's motives are idealistic, as well as opportunistic, but the development of a global free market has benefited large corporations based in the Western world. Its impact remains mixed for workers, cultures, and small businesses around the globe, in both developed and emerging nations .

Globalization is not a new concept. Traders traveled vast distances in ancient times to buy commodities that were rare and expensive for sale in their homelands. The Industrial Revolution brought advances in transportation and communication in the 19th century that eased trade across borders.

The think tank Peterson Institute for International Economics (PIIE) states globalization stalled after World War I, and nations moved toward protectionism as they launched import taxes to more closely guard their industries in the aftermath of the conflict. This trend continued through the Great Depression and World War II until the U.S. took on an instrumental role in reviving international trade .

Globalization has sped up at an unprecedented pace, with public policy changes and communications technology innovations cited as the two main driving factors.

One of the critical steps in the path to globalization came with the North American Free Trade Agreement (NAFTA), signed in 1993. One of NAFTA's many effects was to give American auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico where they could save on the costs of labor. NAFTA was replaced in 2020 by the United States-Mexico-Canada Agreement (USMC) .

Governments worldwide have integrated a free market economic system through  fiscal policies  and trade agreements in the 20th century. The core of most trade agreements is the removal or reduction of tariffs.

This evolution of economic systems has increased industrialization and financial opportunities in many nations. Governments now focus on removing barriers to trade and promoting international commerce.

Pros and Cons of Globalization

A larger market for goods and services

Cheaper consumer prices

Outsourcing can benefit both domestic firms and foreign labor

Increased standard of living

Concentrates wealth in richer countries

Some poorer countries can be left behind

Poorer countries can be exploited of their labor and physical & intellectual resources

Cultures and the products consumed around the world can become homogenized

Proponents of globalization believe it allows developing countries to catch up to industrialized nations through increased manufacturing, diversification, economic expansion, and improvements in standards of living .

Outsourcing by companies brings jobs and technology to developing countries, which helps them to grow their economies. Trade initiatives increase cross-border trading by removing supply-side and trade-related constraints.

Globalization has advanced  social justice  on an international scale as well, and advocates report that it has focused attention on human rights worldwide that might have otherwise been ignored on a large scale.

One clear result of globalization is that an economic downturn in one country can create a domino effect through its trade partners. For example, the 2008 financial crisis had a severe impact on Portugal, Ireland, Italy, Greece, and Spain. All these countries were members of the European Union , which had to step in to bail out debt-laden nations, which were thereafter known by the acronym PIIGS .

Globalization detractors argue that it has created a concentration of wealth and power in the hands of a small corporate elite that can gobble up smaller competitors around the globe.

Globalization has become a polarizing issue in the U.S. with the disappearance of entire industries to new locations abroad. It's seen as a major factor in the economic squeeze on the middle class .

For better and worse, globalization has also increased homogenization. Starbucks, Nike, and Gap dominate commercial space in many nations. The sheer size and reach of the U.S. have made the cultural exchange among nations largely a one-sided affair.

What Is Globalization and Why Is it Important?

In essence, globalization is about the world becoming increasingly interconnected . Countries today are more connected than ever before, due to factors such as air travel, containerized sea shipping, international trade agreements and legal treaties, and the Internet. In the world of business, globalization is associated with trends such as outsourcing, free trade, and international supply chains. Globalization is important as it increases the size of the global market, and allows more and different goods to be produced and sold for cheaper prices.

Globalization is also important because it is one of the most powerful forces affecting the modern world, so much so that it can be difficult to make sense of the world without understanding globalization. For example, many of the largest and most successful corporations in the world are in effect truly multinational organizations, with offices and supply chains stretched right across the world. These companies would not be able to exist if not for the complex network of trade routes, international legal agreements, and telecommunications infrastructure that were made possible through globalization. Important political developments, such as the ongoing trade conflict between the United States and China, are also directly related to globalization.

Is Globalization Good or Bad?

It depends. Proponents of globalization will point to the dramatic decline in poverty throughout the world for more than two decades after around year 2000, which many economists attribute in part to increased trade and investment between nations. Similarly, they will argue that globalization has allowed products and services such as cellphones, airplanes, and information technology to be spread far more widely throughout the world. On the other hand, critics of globalization will point to the negative impact it has had on specific nations’ industries, which might face increased competition from international firms. Globalization can also have negative environmental impacts due to economic development, industrialization, and international travel.

How Does Globalization Impact Society?

Globalization has had a large impact on societies around the world, leading to massive migrations from rural to industrial or urban areas, leading to the rapid growth of cities and trade hubs. While this has led to an overall increase in incomes and a higher standard of living in general, it has also led to problems of urbanization including crime, domestic violence, homelessness, and poverty. Concepts of national identity, culture, and consumption patterns also change as goods from around the world become increasingly available and at low prices. The competitiveness of global capitalism may also lead to more individualistic ideals that contradict the cultural orientations of certain, more collectivist societies.

What Is an Example of Globalization?

A simple example of globalization would be a car manufactured in the U.S. that sources parts from China, Japan, South Korea, Sri Lanka, and South Africa. The car is then exported to Europe, where it is sold to a driver who fills the car's gas tank with gasoline refined from Saudi oil.

Globalization refers to the ongoing trend of increased interconnectivity across the globe, as enabled by advancements in transportation and information technology, among others. Globalization is economically facilitated by free trade agreements, which permit barrier-free imports and exports across borders. While globalization brings many advantages—including lower prices and higher standards of living—it also has drawbacks, including wealth concentration and cultural homogenization.

Peterson Institute for International Economics. " What Is Globalization? "

Congressional Research Service. " The North American Free Trade Agreement ," Page 1.

Congressional Research Service. " The North American Free Trade Agreement ." Pages 16-17.

Office of the United States Trade Representative. " United States-Mexico-Canada Agreement ."

FasterCapital. “ Financial Bailout: PIIGS and Financial Bailouts: Lessons From the Crisis .”

Macrotrends. “ World Poverty Rate 1981-2024 .”

• Terms of Service
• Editorial Policy
• Privacy Policy
• Your Privacy Choices

Live revision! Join us for our free exam revision livestreams Watch now →

Reference Library

Collections

• See what's new
• All Resources
• Student Resources
• Assessment Resources
• Teaching Resources
• CPD Courses
• Livestreams

Study notes, videos, interactive activities and more!

Economics news, insights and enrichment

Currated collections of free resources

Browse resources by topic

• All Economics Resources

Resource Selections

Currated lists of resources

• Practice Exam Questions

Impact of Globalisation (Revision Essay Plan)

Last updated 11 Jan 2022

• Share on Facebook
• Share on Twitter
• Share by Email

Here is a suggested answer to a question on the impact of globalisation on developed and developing countries.

Introductory Context

An estimated 9 percent of the global population still lives below the international poverty line of US$1.90 PPP a day.Success in reducing poverty in East Asia is clear with 7 percent of the population in the region living below the US$3.20 PPP line and 25 percent living below the US$5.50 PPP poverty line in 2018. However, almost 70 percent of Sub-Saharan Africa’s population lives on less than US$3.20 per day. Progress in cutting extreme poverty has been halted by the pandemic. The World Bank estimated that the pandemic pushed between 119 and 124 million people into extreme poverty around the globe in 2020. Many developing countries have limited resilience to the impact of economic shocks and threats from climate change.”.

Source: Adapted from the World Bank Poverty Report, 2021

To what extent have the economic benefits of globalisation favoured developed over developing countries? (25 marks)

KAA Point 1

Globalisation involves deeper integration between countries through networks of trade, capital flows, ideas, technologies and movement of people. One argument that globalisation has favoured high-income countries lies in the growing dominance of TNCs from advanced nations. TNCs base their manufacturing, assembly, research and retail operations across several countries, and many have become synonymous with globalisation namely Nike, Apple, Amazon, Google (Alphabet) and Samsung. Some have annual revenues many times higher than the GDP of smaller low-income countries and there has been fierce criticism of numerous TNCs for following tax avoidance strategies such as transfer pricing. This has reduced tax revenues for governments in developing nations which then hampers their ability to use fiscal policy to fund public services such as education and basic health care. The effect is to limit progress in reducing extreme poverty and improving human development outcomes.

Evaluation Point 1

A counter argument is that globalisation is associated with a steady reduction in import tariffs around the world which has then improved access to high-income markets for businesses from emerging countries. Many nations in east Asia have achieved reductions in extreme poverty driven by export-led growth. The extract says that only 7 percent of this region’s population now live below the US$3.20 PPP poverty line and continued high growth – as economies recover from the effects of the pandemic - will lead to improvements in per capita incomes and living standards. Indeed, sixty percent of the value of world GDP now comes from emerging market and developing economies and several countries have their own TNCs operating on a global scale. The recent success of countries such as South Korea, India and Vietnam is testimony to the opportunities that globalisation has offered developing nations who have developed competitive advantage across a range of industries.

KAA Point 2

A second argument supporting the question is that nations succeeding in a globalizing world have diversified economies, a workforce with flexible skills and governments with fiscal resources to overcome external shocks such as the pandemic. In contrast, poorer low-income countries rely heavily on the production and export of primary commodities or incomes from tourism, both of which have been hit by the global recession in 2020-21. Many poorer nations also haveinadequate infrastructure which increases the costs of trade and their direct tax revenues as a share of GDP are low because of sizeable informal economies and persistently low per capita incomes. This means that national governments rely heavily on external debt, and many have low currency reserves. They are therefore more exposed to economic, financial and public health shocks. This is evidenced by the differences in vaccination rates between rich and low-income countries. As of January 2022, only 9% of people in low-income countries have received at least one dose and per capita incomes may take years to reach pre-2020 levels.

Evaluation Point 2

In evaluation, the globalisation process has been a catalyst for economic reforms in low and middle-income countries. Consider the example of Vietnam which has transitioned to a socialist oriented market economy and successfully attracted inward FDI from companies such as LG and Samsung. FDIhas flowed in helped by low unit labour costs costs, improving infrastructure and human capital and a deregulated business environment whilst the Vietnamesegovernment has moved to a managed floating exchange rateto help reduce some of the risks from regional and global economic shocks. Vietnam is a good example of a country that has successfully progressed from a low income to a low-middle income nation over the last two decades. The valueof their external trade accounts for roughly 180% of national output, more than any other country at its level of per-person GDP. And their educational scores on standardized tests are on a par with Germany and Austria.

Final Reasoned Comment

Overall, it is hard to reach a firm view on this question because globalisation as a process is uneven and not inevitable. Before and during the pandemic, there was evidence of a switch towards “regionalisation” rather than full-throttled globalisation. For example, most sub-Saharan African countries have joined the African Continental Free Trade Area which seeks to boost intra-regional trade and investment and encourage economies of scale among African businesses so that they can better compete against the dominance of Western TNCs. Developing nations often struggle to compete with developed countries, therefore it is argued free trade benefits high-income economies more. Gains from globalisation will never be equitably distributed.And this sense of deepening inequality and opportunity risks a further shift to tariff and non-tariff barriers to trade and moves towards economic nationalism.

• Globalisation
• Deglobalisation
• Hyper-globalisation
• Transnational Businesses
• Developing countries

You might also like

Benefits and costs of globalisation.

Study Notes

Import Protectionism - Main Arguments Against

Trading blocs and regional trade agreements (rtas), explaining business objectives, international trade, sources of comparative advantage, import protectionism explained, our subjects.

• › Criminology
• › Economics
• › Geography
• › Health & Social Care
• › Psychology
• › Sociology
• › Teaching & learning resources
• › Student revision workshops
• › Online student courses
• › CPD for teachers
• › Livestreams
• › Teaching jobs

Boston House, 214 High Street, Boston Spa, West Yorkshire, LS23 6AD Tel: 01937 848885

• › Contact us
• › Terms of use
• › Privacy & cookies

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.

Question and Answer forum for K12 Students

What is Globalisation? Advantages and Disadvantages of Globalisation

Advantages and Disadvantages of Globalisation: Globalisation implies the speedup in exchanges and movement (of goods and services, capital, human beings, or even cultural practices) all across the globe. One of the globalisation effects is that it increases and encourages the interactions between the various regions and populations worldwide. Although globalisation was necessary for development, there are also some disadvantages to it. In this writing, we will discuss the pros and cons of globalisation.

What is Globalisation? Advantages and Disadvantages of Globalisation 2021

Advantages of globalisation, disadvantages of globalisation.

• Comparison Table for Advantages and Disadvantages of Globalisation
• FAQs on Pros and Cons of Globalisation

In international economics, globalisation can be defined as the web of relationships between the economies worldwide through international investments and trade. While the history of globalisation travels back to ancient times, the modern era started in the early nineteenth century.

The opposite of globalisation — also known as free-market trade across the borders — is protectionism. This economic policy attempts at protecting domestic businesses from foreign competitions and labour markets, generally by imposing trade barriers such as tariffs.

As a result of globalisation, people all over the world enjoy many advantages.

• Transfer of Technology: The transfer of technology all over the globe is excellent for us. Any country can choose to borrow the technology by the agreement and implement it in their country for the overall development. People can easily be in touch with people from any part of the world by using advanced technologies at a minimal cost, effort, and time.
• Better Services: Globalisation always offers us better services. With technological advancement, services such as electricity supply, water supply, internet, mobile networking, and other services have become more accessible and better than before. Easy internet access throughout the world is also the contribution of globalisation.
• Standardisation of Living: The critical process of globalisation is the integration of economics, enabling countries to fight against problems like poverty and improve people’s living standards. Many researchers have stated that when any country opens up its trade to the world, its economic growth rate is faster, and the living standards tend to improve.
• Development of Infrastructure: Technological advancements and their spread throughout the globe help in improving the country’s infrastructure. Governments are more enabling of delivering their services to the citizens. Development of the infrastructure implies the overall development of the respective countries. Here it is essential to say that the economic growth and development of a country’s infrastructure are compatible with each other.
• Foreign Exchange Reserves: By globalisation, countries are able to build foreign exchange reserves due to the international financial flows.
• Economic Growth: Globalisation requires optimum utilisation of the resources wherein the deficit resources are procured, and surplus resources are exported to various other countries. This guarantees overall economic growth.
• Contribution to the World GDP Growth Rate: Globalisation guarantees the contribution of each country to the world GDP growth rate.

The globalisation keeps doing well to us is not always true. It impacts our lives in a multidimensional manner. So, it has a few disadvantages as well.

Growing Inequality: Globalisation increases inequality throughout the globe by expanding specialisation and trade. Even though profession and trade amp up the per-capita income, it might cause relative poverty.

To explain this, we will use an example. All dominated MNCs around the globe are located in the US. All these businesses are buying cheap labour from developing or underdeveloped countries for product manufacturing or assembling. India, China and Africa are significant examples of this. It increases the employment rates of these countries, but they are far behind lagging relatively developed countries. Again, these companies coming to such countries for cheap labour also deprive the country’s people of working. So, it showcases that relative unemployment and poverty are being created in these developed countries as well.

Increasing the Unemployment rate: Globalisation is increasing the unemployment rate. Where individuals are getting jobs, how is this possible? Here is the explanation.

Globalisation needs higher-skilled workers at cheaper rates. But countries where the Institutions are comparatively weaker, aren’t capable of producing highly skilled workers. As a result of which, the unemployment rates are increasing in these countries.

When foreign companies invest primarily in developing countries, they hire workers from that country. In some scenarios, their wages are significantly lower compared to the other developed countries – the demand for such employees in developed countries is much lower. Moreover, along with the emergence of the Global Economic Crisis, jobs are at risk.

Trade Imbalance: The trade balance refers to the value ratio between the country’s export and import services and goods. Due to globalisation, any country can trade to any part of the globe.

In some instances, the developing countries are highly dependent on developed countries for import goods, but the export capabilities are lower than the imports. The imbalance in trade has been taking place. So, trade imbalance balances values between any country’s import and export of goods and services. It is also known as trade deficits. Trade imbalance might be an increase in the developed countries by the competitors.

Environmental Loots: The pace at which industrialisation is increasing is an outcome of globalisation. Industrialisation encourages economic growth. However, it harms the environment. Globalisation destroys nature, and it hurts humans very severely.

Let’s try to understand the scenario with the example. Coca-Cola world’s leading soft drink company. This company consumes a large amount of water to make soft drinks. In a north Indian state, Uttar Pradesh, a bottling plant of Coca-Cola, was shut down by the government order due to the local farmers’ too much water usage.

In Kerala, a south Indian state, the Coca-Cola plant was also shut down due to water pollution supplied to the local communities. Also, MNCs are using the natural resources from different countries extensively for personal gain. Various chemical industries are highly harmful to the health of humans by polluting the soil, water, air.

Comparison Table for Advantages and Disadvantages of Globalisation

Faq’s on pros and cons of globalisation.

Question 1. How does globalisation encourage market extension?

Answer: Above all, Globalization encourages market extension. It offers an opportunity for domestic companies to go global. For instance, domestic companies can be witnessing saturation in demand for their services or products. Still, by globalisation, domestic companies are able to sustain and satisfy the needs of foreign customers.

Question 2. How does globalisation offer affordable products?

Answer: With access to the latest technologies, the countries are able to provide products to their citizens at affordable rates. Globalisation encourages competition in the domestic economies and its endeavour for competing against the competition, companies lessen the product price or following the penetration pricing policy.

Question 3. When did globalisation start?

Answer: The first wave of globalisation began in the 19th century in the year 1914. This started in order to change with the first globalisation wave, which roughly took place over the century ending in 1914.

Click through the PLOS taxonomy to find articles in your field.

For more information about PLOS Subject Areas, click here .

Loading metrics

Open Access

Peer-reviewed

Research Article

Globalization and Economic Growth: Empirical Evidence on the Role of Complementarities

* E-mail: [email protected]

Affiliations Faculty of Management, Universiti Teknologi Malaysia (UTM), Johor, Malaysia, Department of Management, Mobarakeh Branch, Islamic Azad University, Isfahan, Iran

Affiliation Applied Statistics Department, Economics and Administration Faculty, University of Malaya, Kuala Lumpur, Malaysia

• Parisa Samimi, 
• Hashem Salarzadeh Jenatabadi

• Published: April 10, 2014
• https://doi.org/10.1371/journal.pone.0087824
• Reader Comments

This study was carried out to investigate the effect of economic globalization on economic growth in OIC countries. Furthermore, the study examined the effect of complementary policies on the growth effect of globalization. It also investigated whether the growth effect of globalization depends on the income level of countries. Utilizing the generalized method of moments (GMM) estimator within the framework of a dynamic panel data approach, we provide evidence which suggests that economic globalization has statistically significant impact on economic growth in OIC countries. The results indicate that this positive effect is increased in the countries with better-educated workers and well-developed financial systems. Our finding shows that the effect of economic globalization also depends on the country’s level of income. High and middle-income countries benefit from globalization whereas low-income countries do not gain from it. In fact, the countries should receive the appropriate income level to be benefited from globalization. Economic globalization not only directly promotes growth but also indirectly does so via complementary reforms.

Citation: Samimi P, Jenatabadi HS (2014) Globalization and Economic Growth: Empirical Evidence on the Role of Complementarities. PLoS ONE 9(4): e87824. https://doi.org/10.1371/journal.pone.0087824

Editor: Rodrigo Huerta-Quintanilla, Cinvestav-Merida, Mexico

Received: November 5, 2013; Accepted: January 2, 2014; Published: April 10, 2014

Copyright: © 2014 Samimi, Jenatabadi. This is an open-access article distributed under the terms of the Creative Commons Attribution License , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

Funding: The study is supported by the Ministry of Higher Education of Malaysia, Malaysian International Scholarship (MIS). The funders had no role in study design, data collection and analysis, decision to publish, or preparation of the manuscript.

Competing interests: The authors have declared that no competing interests exist.

Introduction

Globalization, as a complicated process, is not a new phenomenon and our world has experienced its effects on different aspects of lives such as economical, social, environmental and political from many years ago [1] – [4] . Economic globalization includes flows of goods and services across borders, international capital flows, reduction in tariffs and trade barriers, immigration, and the spread of technology, and knowledge beyond borders. It is source of much debate and conflict like any source of great power.

The broad effects of globalization on different aspects of life grab a great deal of attention over the past three decades. As countries, especially developing countries are speeding up their openness in recent years the concern about globalization and its different effects on economic growth, poverty, inequality, environment and cultural dominance are increased. As a significant subset of the developing world, Organization of Islamic Cooperation (OIC) countries are also faced by opportunities and costs of globalization. Figure 1 shows the upward trend of economic globalization among different income group of OIC countries.

• PPT PowerPoint slide
• PNG larger image
• TIFF original image

https://doi.org/10.1371/journal.pone.0087824.g001

Although OICs are rich in natural resources, these resources were not being used efficiently. It seems that finding new ways to use the OICs economic capacity more efficiently are important and necessary for them to improve their economic situation in the world. Among the areas where globalization is thought, the link between economic growth and globalization has been become focus of attention by many researchers. Improving economic growth is the aim of policy makers as it shows the success of nations. Due to the increasing trend of globalization, finding the effect of globalization on economic growth is prominent.

The net effect of globalization on economic growth remains puzzling since previous empirical analysis did not support the existent of a systematic positive or negative impact of globalization on growth. Most of these studies suffer from econometrics shortcoming, narrow definition of globalization and small number of countries. The effect of economic globalization on the economic growth in OICs is also ambiguous. Existing empirical studies have not indicated the positive or negative impact of globalization in OICs. The relationship between economic globalization and economic growth is important especially for economic policies.

Recently, researchers have claimed that the growth effects of globalization depend on the economic structure of the countries during the process of globalization. The impact of globalization on economic growth of countries also could be changed by the set of complementary policies such as improvement in human capital and financial system. In fact, globalization by itself does not increase or decrease economic growth. The effect of complementary policies is very important as it helps countries to be successful in globalization process.

In this paper, we examine the relationship between economic globalization and growth in panel of selected OIC countries over the period 1980–2008. Furthermore, we would explore whether the growth effects of economic globalization depend on the set of complementary policies and income level of OIC countries.

The paper is organized as follows. The next section consists of a review of relevant studies on the impact of globalization on growth. Afterward the model specification is described. It is followed by the methodology of this study as well as the data sets that are utilized in the estimation of the model and the empirical strategy. Then, the econometric results are reported and discussed. The last section summarizes and concludes the paper with important issues on policy implications.

Literature Review

The relationship between globalization and growth is a heated and highly debated topic on the growth and development literature. Yet, this issue is far from being resolved. Theoretical growth studies report at best a contradictory and inconclusive discussion on the relationship between globalization and growth. Some of the studies found positive the effect of globalization on growth through effective allocation of domestic resources, diffusion of technology, improvement in factor productivity and augmentation of capital [5] , [6] . In contrast, others argued that globalization has harmful effect on growth in countries with weak institutions and political instability and in countries, which specialized in ineffective activities in the process of globalization [5] , [7] , [8] .

Given the conflicting theoretical views, many studies have been empirically examined the impact of the globalization on economic growth in developed and developing countries. Generally, the literature on the globalization-economic growth nexus provides at least three schools of thought. First, many studies support the idea that globalization accentuates economic growth [9] – [19] . Pioneering early studies include Dollar [9] , Sachs et al. [15] and Edwards [11] , who examined the impact of trade openness by using different index on economic growth. The findings of these studies implied that openness is associated with more rapid growth.

In 2006, Dreher introduced a new comprehensive index of globalization, KOF, to examine the impact of globalization on growth in an unbalanced dynamic panel of 123 countries between 1970 and 2000. The overall result showed that globalization promotes economic growth. The economic and social dimensions have positive impact on growth whereas political dimension has no effect on growth. The robustness of the results of Dreher [19] is approved by Rao and Vadlamannati [20] which use KOF and examine its impact on growth rate of 21 African countries during 1970–2005. The positive effect of globalization on economic growth is also confirmed by the extreme bounds analysis. The result indicated that the positive effect of globalization on growth is larger than the effect of investment on growth.

The second school of thought, which supported by some scholars such as Alesina et al. [21] , Rodrik [22] and Rodriguez and Rodrik [23] , has been more reserve in supporting the globalization-led growth nexus. Rodriguez and Rodrik [23] challenged the robustness of Dollar (1992), Sachs, Warner et al. (1995) and Edwards [11] studies. They believed that weak evidence support the idea of positive relationship between openness and growth. They mentioned the lack of control for some prominent growth indicators as well as using incomprehensive trade openness index as shortcomings of these works. Warner [24] refuted the results of Rodriguez and Rodrik (2000). He mentioned that Rodriguez and Rodrik (2000) used an uncommon index to measure trade restriction (tariffs revenues divided by imports). Warner (2003) explained that they ignored all other barriers on trade and suggested using only the tariffs and quotas of textbook trade policy to measure trade restriction in countries.

Krugman [25] strongly disagreed with the argument that international financial integration is a major engine of economic development. This is because capital is not an important factor to increase economic development and the large flows of capital from rich to poor countries have never occurred. Therefore, developing countries are unlikely to increase economic growth through financial openness. Levine [26] was more optimistic about the impact of financial liberalization than Krugman. He concluded, based on theory and empirical evidences, that the domestic financial system has a prominent effect on economic growth through boosting total factor productivity. The factors that improve the functioning of domestic financial markets and banks like financial integration can stimulate improvements in resource allocation and boost economic growth.

The third school of thoughts covers the studies that found nonlinear relationship between globalization and growth with emphasis on the effect of complementary policies. Borensztein, De Gregorio et al. (1998) investigated the impact of FDI on economic growth in a cross-country framework by developing a model of endogenous growth to examine the role of FDI in the economic growth in developing countries. They found that FDI, which is measured by the fraction of products produced by foreign firms in the total number of products, reduces the costs of introducing new varieties of capital goods, thus increasing the rate at which new capital goods are introduced. The results showed a strong complementary effect between stock of human capital and FDI to enhance economic growth. They interpreted this finding with the observation that the advanced technology, brought by FDI, increases the growth rate of host economy when the country has sufficient level of human capital. In this situation, the FDI is more productive than domestic investment.

Calderón and Poggio [27] examined the structural factors that may have impact on growth effect of trade openness. The growth benefits of rising trade openness are conditional on the level of progress in structural areas including education, innovation, infrastructure, institutions, the regulatory framework, and financial development. Indeed, they found that the lack of progress in these areas could restrict the potential benefits of trade openness. Chang et al. [28] found that the growth effects of openness may be significantly improved when the investment in human capital is stronger, financial markets are deeper, price inflation is lower, and public infrastructure is more readily available. Gu and Dong [29] emphasized that the harmful or useful growth effect of financial globalization heavily depends on the level of financial development of economies. In fact, if financial openness happens without any improvement in the financial system of countries, growth will replace by volatility.

However, the review of the empirical literature indicates that the impact of the economic globalization on economic growth is influenced by sample, econometric techniques, period specifications, observed and unobserved country-specific effects. Most of the literature in the field of globalization, concentrates on the effect of trade or foreign capital volume (de facto indices) on economic growth. The problem is that de facto indices do not proportionally capture trade and financial globalization policies. The rate of protections and tariff need to be accounted since they are policy based variables, capturing the severity of trade restrictions in a country. Therefore, globalization index should contain trade and capital restrictions as well as trade and capital volume. Thus, this paper avoids this problem by using a comprehensive index which called KOF [30] . The economic dimension of this index captures the volume and restriction of trade and capital flow of countries.

Despite the numerous studies, the effect of economic globalization on economic growth in OIC is still scarce. The results of recent studies on the effect of globalization in OICs are not significant, as they have not examined the impact of globalization by empirical model such as Zeinelabdin [31] and Dabour [32] . Those that used empirical model, investigated the effect of globalization for one country such as Ates [33] and Oyvat [34] , or did it for some OIC members in different groups such as East Asia by Guillaumin [35] or as group of developing countries by Haddad et al. [36] and Warner [24] . Therefore, the aim of this study is filling the gap in research devoted solely to investigate the effects of economic globalization on growth in selected OICs. In addition, the study will consider the impact of complimentary polices on the growth effects of globalization in selected OIC countries.

Model Specification

Methodology and Data

This paper applies the generalized method of moments (GMM) panel estimator first suggested by Anderson and Hsiao [38] and later developed further by Arellano and Bond [39] . This flexible method requires only weak assumption that makes it one of the most widely used econometric techniques especially in growth studies. The dynamic GMM procedure is as follow: first, to eliminate the individual effect form dynamic growth model, the method takes differences. Then, it instruments the right hand side variables by using their lagged values. The last step is to eliminate the inconsistency arising from the endogeneity of the explanatory variables.

The consistency of the GMM estimator depends on two specification tests. The first is a Sargan test of over-identifying restrictions, which tests the overall validity of the instruments. Failure to reject the null hypothesis gives support to the model. The second test examines the null hypothesis that the error term is not serially correlated.

The GMM can be applied in one- or two-step variants. The one-step estimators use weighting matrices that are independent of estimated parameters, whereas the two-step GMM estimator uses the so-called optimal weighting matrices in which the moment conditions are weighted by a consistent estimate of their covariance matrix. However, the use of the two-step estimator in small samples, as in our study, has problem derived from proliferation of instruments. Furthermore, the estimated standard errors of the two-step GMM estimator tend to be small. Consequently, this paper employs the one-step GMM estimator.

In the specification, year dummies are used as instrument variable because other regressors are not strictly exogenous. The maximum lags length of independent variable which used as instrument is 2 to select the optimal lag, the AR(1) and AR(2) statistics are employed. There is convincing evidence that too many moment conditions introduce bias while increasing efficiency. It is, therefore, suggested that a subset of these moment conditions can be used to take advantage of the trade-off between the reduction in bias and the loss in efficiency. We restrict the moment conditions to a maximum of two lags on the dependent variable.

Data and Empirical Strategy

We estimated Eq. (1) using the GMM estimator based on a panel of 33 OIC countries. Table S1 in File S1 lists the countries and their income groups in the sample. The choice of countries selected for this study is primarily dictated by availability of reliable data over the sample period among all OIC countries. The panel covers the period 1980–2008 and is unbalanced. Following [40] , we use annual data in order to maximize sample size and to identify the parameters of interest more precisely. In fact, averaging out data removes useful variation from the data, which could help to identify the parameters of interest with more precision.

The dependent variable in our sample is logged per capita real GDP, using the purchasing power parity (PPP) exchange rates and is obtained from the Penn World Table (PWT 7.0). The economic dimension of KOF index is derived from Dreher et al. [41] . We use some other variables, along with economic globalization to control other factors influenced economic growth. Table S2 in File S2 shows the variables, their proxies and source that they obtain.

We relied on the three main approaches to capture the effects of economic globalization on economic growth in OIC countries. The first one is the baseline specification (Eq. (1)) which estimates the effect of economic globalization on economic growth.

The second approach is to examine whether the effect of globalization on growth depends on the complementary policies in the form of level of human capital and financial development. To test, the interactions of economic globalization and financial development (KOF*FD) and economic globalization and human capital (KOF*HCS) are included as additional explanatory variables, apart from the standard variables used in the growth equation. The KOF, HCS and FD are included in the model individually as well for two reasons. First, the significance of the interaction term may be the result of the omission of these variables by themselves. Thus, in that way, it can be tested jointly whether these variables affect growth by themselves or through the interaction term. Second, to ensure that the interaction term did not proxy for KOF, HCS or FD, these variables were included in the regression independently.

In the third approach, in order to study the role of income level of countries on the growth effect of globalization, the countries are split based on income level. Accordingly, countries were classified into three groups: high-income countries (3), middle-income (21) and low-income (9) countries. Next, dummy variables were created for high-income (Dum 3), middle-income (Dum 2) and low-income (Dum 1) groups. Then interaction terms were created for dummy variables and KOF. These interactions will be added to the baseline specification.

Findings and Discussion

This section presents the empirical results of three approaches, based on the GMM -dynamic panel data; in Tables 1 – 3 . Table 1 presents a preliminary analysis on the effects of economic globalization on growth. Table 2 displays coefficient estimates obtained from the baseline specification, which used added two interaction terms of economic globalization and financial development and economic globalization and human capital. Table 3 reports the coefficients estimate from a specification that uses dummies to capture the impact of income level of OIC countries on the growth effect of globalization.

https://doi.org/10.1371/journal.pone.0087824.t001

https://doi.org/10.1371/journal.pone.0087824.t002

https://doi.org/10.1371/journal.pone.0087824.t003

The results in Table 1 indicate that economic globalization has positive impact on growth and the coefficient is significant at 1 percent level. The positive effect is consistent with the bulk of the existing empirical literature that support beneficial effect of globalization on economic growth [9] , [11] , [13] , [19] , [42] , [43] .

According to the theoretical literature, globalization enhances economic growth by allocating resources more efficiently as OIC countries that can be specialized in activities with comparative advantages. By increasing the size of markets through globalization, these countries can be benefited from economic of scale, lower cost of research and knowledge spillovers. It also augments capital in OICs as they provide a higher return to capital. It has raised productivity and innovation, supported the spread of knowledge and new technologies as the important factors in the process of development. The results also indicate that growth is enhanced by lower level of government expenditure, lower level of inflation, higher level of human capital, deeper financial development, more domestic investment and better institutions.

Table 2 represents that the coefficients on the interaction between the KOF, HCS and FD are statistically significant at 1% level and with the positive sign. The findings indicate that economic globalization not only directly promotes growth but also indirectly does via complementary reforms. On the other hand, the positive effect of economic globalization can be significantly enhanced if some complementary reforms in terms of human capital and financial development are undertaken.

In fact, the implementation of new technologies transferred from advanced economies requires skilled workers. The results of this study confirm the importance of increasing educated workers as a complementary policy in progressing globalization. However, countries with higher level of human capital can be better and faster to imitate and implement the transferred technologies. Besides, the financial openness brings along the knowledge and managerial for implementing the new technology. It can be helpful in improving the level of human capital in host countries. Moreover, the strong and well-functioned financial systems can lead the flow of foreign capital to the productive and compatible sectors in developing countries. Overall, with higher level of human capital and stronger financial systems, the globalized countries benefit from the growth effect of globalization. The obtained results supported by previous studies in relative to financial and trade globalization such as [5] , [27] , [44] , [45] .

Table (3 ) shows that the estimated coefficients on KOF*dum3 and KOF*dum2 are statistically significant at the 5% level with positive sign. The KOF*dum1 is statistically significant with negative sign. It means that increase in economic globalization in high and middle-income countries boost economic growth but this effect is diverse for low-income countries. The reason might be related to economic structure of these countries that are not received to the initial condition necessary to be benefited from globalization. In fact, countries should be received to the appropriate income level to be benefited by globalization.

The diagnostic tests in tables 1 – 3 show that the estimated equation is free from simultaneity bias and second-order correlation. The results of Sargan test accept the null hypothesis that supports the validity of the instrument use in dynamic GMM.

Conclusions and Implications

Numerous researchers have investigated the impact of economic globalization on economic growth. Unfortunately, theoretical and the empirical literature have produced conflicting conclusions that need more investigation. The current study shed light on the growth effect of globalization by using a comprehensive index for globalization and applying a robust econometrics technique. Specifically, this paper assesses whether the growth effects of globalization depend on the complementary polices as well as income level of OIC countries.

Using a panel data of OIC countries over the 1980–2008 period, we draw three important conclusions from the empirical analysis. First, the coefficient measuring the effect of the economic globalization on growth was positive and significant, indicating that economic globalization affects economic growth of OIC countries in a positive way. Second, the positive effect of globalization on growth is increased in countries with higher level of human capital and deeper financial development. Finally, economic globalization does affect growth, whether the effect is beneficial depends on the level of income of each group. It means that economies should have some initial condition to be benefited from the positive effects of globalization. The results explain why some countries have been successful in globalizing world and others not.

The findings of our study suggest that public policies designed to integrate to the world might are not optimal for economic growth by itself. Economic globalization not only directly promotes growth but also indirectly does so via complementary reforms.

The policy implications of this study are relatively straightforward. Integrating to the global economy is only one part of the story. The other is how to benefits more from globalization. In this respect, the responsibility of policymakers is to improve the level of educated workers and strength of financial systems to get more opportunities from globalization. These economic policies are important not only in their own right, but also in helping developing countries to derive the benefits of globalization.

However, implementation of new technologies transferred from advanced economies requires skilled workers. The results of this study confirm the importance of increasing educated workers as a complementary policy in progressing globalization. In fact, countries with higher level of human capital can better and faster imitate and implement the transferred technologies. The higher level of human capital and certain skill of human capital determine whether technology is successfully absorbed across countries. This shows the importance of human capital in the success of countries in the globalizing world.

Financial openness in the form of FDI brings along the knowledge and managerial for implementing the new technology. It can be helpful in upgrading the level of human capital in host countries. Moreover, strong and well-functioned financial systems can lead the flow of foreign capital to the productive and compatible sectors in OICs.

In addition, the results show that economic globalization does affect growth, whether the effect is beneficial depends on the level of income of countries. High and middle income countries benefit from globalization whereas low-income countries do not gain from it. As Birdsall [46] mentioned globalization is fundamentally asymmetric for poor countries, because their economic structure and markets are asymmetric. So, the risks of globalization hurt the poor more. The structure of the export of low-income countries heavily depends on primary commodity and natural resource which make them vulnerable to the global shocks.

The major research limitation of this study was the failure to collect data for all OIC countries. Therefore future research for all OIC countries would shed light on the relationship between economic globalization and economic growth.

Supporting Information

Sample of Countries.

https://doi.org/10.1371/journal.pone.0087824.s001

The Name and Definition of Indicators.

https://doi.org/10.1371/journal.pone.0087824.s002

Author Contributions

Conceived and designed the experiments: PS. Performed the experiments: PS. Analyzed the data: PS. Contributed reagents/materials/analysis tools: PS HSJ. Wrote the paper: PS HSJ.

• View Article
• Google Scholar
• 2. Bhandari AK, Heshmati A (2005) Measurement of Globalization and its Variations among Countries, Regions and over Time. IZA Discussion Paper No.1578.
• 3. Collins W, Williamson J (1999) Capital goods prices, global capital markets and accumulation: 1870–1950. NBER Working Paper No.7145.
• 4. Obstfeld M, Taylor A (1997) The great depression as a watershed: international capital mobility over the long run. In: D M, Bordo CG, and Eugene N White, editors. The Defining Moment: The Great Depression and the American Economy in the Twentieth Century. Chicago and London: University of Chicago Press: NBER Project Report series. 353–402.
• 7. De Melo J, Gourdon J, Maystre N (2008) Openness, Inequality and Poverty: Endowments Matter. World Bank Policy Research Working Paper No.3981.
• 8. Berg A, Krueger AO (2003) Trade, growth, and poverty: a selective survey. IMF Working Papers No.1047.
• 16. Barro R, Sala-i-Martin X (2004) Economic Growth. New York: McGraw Hill.
• 21. Alesina A, Grilli V, Milesi-Ferretti G, Center L, del Tesoro M (1994) The political economy of capital controls. In: Leiderman L, Razin A, editors. Capital Mobility: The Impact on Consumption, Investment and Growth. Cambridge: Cambridge University Press. 289–321.
• 22. Rodrik D (1998) Who needs capital-account convertibility? In: Fischer S, editor. Should the IMF Pursue Capital Account Convertibility?, Essays in international finance. Princeton: Department of Economics, Princeton University. 55–65.
• 25. Krugman P (1993) International Finance and Economic Development. In: Giovannini A, editor. Finance and Development: Issues and Experience. Cambridge Cambridge University Press. 11–24.
• 27. Calderón C, Poggio V (2010) Trade and Economic Growth Evidence on the Role of Complementarities for CAFTA-DR Countries. World Bank Policy Research, Working Paper No.5426.
• 30. Samimi P, Lim GC, Buang AA (2011) Globalization Measurement: Notes on Common Globalization Indexes. Knowledge Management, Economics and Information Technology 1(7).
• 36. Haddad ME, Lim JJ, Saborowski C (2010) Trade Openness Reduces Growth Volatility When Countries are Well Diversified. Policy Research Working Paper Series NO. 5222.
• 37. Mammi I (2012) Essays in GMM estimation of dynamic panel data models. Lucca, Italy: IMT Institute for Advanced Studies.
• 41. Dreher A, Gaston N, Martens P (2008) Measuring globalisation: Gauging its consequences: Springer Verlag.
• 42. Brunner A (2003) The long-run effects of trade on income and income growth. IMF Working Papers No. 03/37.
• 44. Alfaro L, Chanda A, Kalemli-Ozcan S, Sayek S (2006) How does foreign direct investment promote economic growth? Exploring the effects of financial markets on linkages. National Bureau of Economic Research working paper.
• 46. Birdsall N (2002) A stormy day on an open field: asymmetry and convergence in the global economy. In: Gruen D, O'Brien T, Lawson J, editors. Globalisation, living standards and inequality. Sydney: Reserve Bank of Australia and Australian. 66–87.
• 47. Solt F (2009) Standardizing the World Income Inequality Database. Social Science Quarterly 90: 231–242 SWIID Version 233.230, July 2010.
• 48. Beck T, Demirgüç-Kunt A, Levine R (2009) Financial Institutions and Markets across Countries and over Time. Policy Research Working Paper No.4943.

25,000+ students realised their study abroad dream with us. Take the first step today

Meet top uk universities from the comfort of your home, here’s your new year gift, one app for all your, study abroad needs, start your journey, track your progress, grow with the community and so much more.

Verification Code

An OTP has been sent to your registered mobile no. Please verify

Thanks for your comment !

Our team will review it before it's shown to our readers.

• Study Abroad Test Prep /

PTE Daily Essay Topic: Although globalisation has a significantly positive impact on the global economy, we must not overlook its negative aspects.

• Updated on  
• May 6, 2024

Brainstorming Ideas

Refer to the following brainstorming ideas to get a solid understanding of the answer.

• One of the most concerning aspects of globalisation is the rise of income inequality. As companies seek lower production costs, jobs often migrate to developing countries with labour regulations.
• Globalisation can be detrimental to the environment. Increased global trade necessitates greater transportation of goods, leading to a rise in greenhouse gas emissions and pollution. 
• Lower production costs can incentivise companies to operate in countries with weaker environmental regulations, resulting in unsustainable practices like deforestation and resource depletion.
• Globalisation, over time, has proven to foster competition and efficiency. As trade barriers diminish, companies face increased competition from international rivals. 
• Consumers benefit from this increased competition through a wider variety of choices and more affordable goods and services. Therefore, globalisation fosters a global marketplace driven by efficiency, leading to a more productive and dynamic global economy.

Q. Although globalisation has a significantly positive impact on the global economy, we must not overlook its negative aspects. Discuss these facets.

Ans . Globalisation, the interconnectedness of nations through trade, investment, and cultural exchange, has undoubtedly revolutionised the world. While it has fostered economic growth and innovation, its impact is not without its downsides. 

One of the most concerning aspects of globalisation is the rise of income inequality. As companies seek lower production costs, jobs often migrate to developing countries with labour regulations. This can lead to job losses in developed nations, particularly in manufacturing sectors, and stagnating wages for unskilled workers. As a result, the gap between the wealthy and the poor widens, creating social unrest and instability.

Furthermore, globalisation can be detrimental to the environment. Increased global trade necessitates greater transportation of goods, leading to a rise in greenhouse gas emissions and pollution. The pursuit of lower production costs can incentivise companies to operate in countries with weaker environmental regulations, resulting in unsustainable practices like deforestation and resource depletion. Thus, globalisation exposes the environment to a constant tug-of-war between economic gain and ecological well-being.

However, there are certain positives to globalisation. Over time, it has proven to foster competition and efficiency. As trade barriers diminish, companies face increased competition from international rivals. This pressure to compete incentivizes businesses to innovate, improve production processes, and offer better-quality products at lower prices. Consumers benefit from this increased competition through a wider variety of choices and more affordable goods and services. Therefore, globalisation fosters a global marketplace driven by efficiency, leading to a more productive and dynamic global economy.

In conclusion, globalisation’s economic benefits are undeniable, but its downsides – rising inequality, environmental damage, – must be addressed. A balanced approach that prioritizes social justice, sustainability, and cultural diversity is crucial. By fostering international cooperation and implementing appropriate regulations, the benefits of globalisation can be leveraged while the negative consequences are addressed, paving the way for a fairer and more sustainable global future.

Paraphrased Statement :  Globalisation, the interconnectedness of nations through trade, investment, and cultural exchange, has undoubtedly revolutionised the world. 

Thesis Statement : While it has fostered economic growth and innovation, its impact is not without its downsides. 

Body Paragraph 1 – Topic Sentence : One of the most concerning aspects of globalisation is the rise of income inequality.

Body Paragraph 1 Supporting Reasons and Explanations: As companies seek lower production costs, jobs often migrate to developing countries with lax labour regulations. This can lead to job losses in developed nations, particularly in manufacturing sectors, and stagnating wages for unskilled workers.

Body Paragraph 2- Topic Sentence:   Globalisation can be detrimental to the environment.

Body Paragraph 2 Supporting Reasons and Explanations: Increased global trade necessitates greater transportation of goods, leading to a rise in greenhouse gas emissions and pollution. The pursuit of lower production costs can incentivise companies to operate in countries with weaker environmental regulations, resulting in unsustainable practices like deforestation and resource depletion.

Conclusion: Globalisation’s economic benefits are undeniable, but its downsides – rising inequality, environmental damage, – must be addressed. A balanced approach that prioritizes social justice, sustainability, and cultural diversity is crucial.

Vocabulary In Use

Linkers and connectors used.

• Furthermore
• In conclusion
• As a result
• One of the most

Are you preparing for the PTE Exam? Check out the blogs below to bolster your chances of securing better scores in the PTE exam.

Download the Leverage App today.

Need help preparing for PTE? Check out the best  PTE preparation courses  in the market offered in a live training environment by trusted educators. If you want to help  studying abroad , call 1800572130 .

Purti Chawla

Purti is a CELTA, British Council, and IDP-certified language trainer. Having worked as a Study Abroad Test Prep Expert for the past 7 years, she has guided thousands of students towards their desirable scores in IELTS, TOEFL, GRE, GMAT and other language proficiency tests to study abroad. She is adept in molding learning strategies according to the needs of the learners and has built multiple courses at Leverage IELTS with result-oriented strategies. Proficient in test prep courses such as IELTS, TOEFL, PTE, and Duolingo, she loves to explore different classroom teaching methods, keeps continuously improving her own skills, and stays abreast with the latest teaching methodologies. She is a master trainer at Leverage Edu and aims to help thousands more through her expertise.

Leave a Reply Cancel reply

Save my name, email, and website in this browser for the next time I comment.

Contact no. *

Connect With Us

25,000+ students realised their study abroad dream with us. take the first step today..

Resend OTP in

Need help with?

Study abroad.

UK, Canada, US & More

IELTS, GRE, GMAT & More

Scholarship, Loans & Forex

Country Preference

New Zealand

Which English test are you planning to take?

Which academic test are you planning to take.

Not Sure yet

When are you planning to take the exam?

Already booked my exam slot

Within 2 Months

Want to learn about the test

Which Degree do you wish to pursue?

When do you want to start studying abroad.

January 2024

September 2024

What is your budget to study abroad?

How would you describe this article ?

Please rate this article

We would like to hear more.

Have something on your mind?

Make your study abroad dream a reality in January 2022 with

India's Biggest Virtual University Fair

Essex Direct Admission Day

Why attend .

Don't Miss Out

After decades of rising economic integration, the global economy is fragmenting. What can Australia do about it?

Analysis After decades of rising economic integration, the global economy is fragmenting. What can Australia do about it?

Prime Minister Anthony Albanese made an important speech two weeks ago.

He said "strategic competition" had become a fact of life.

He warned major advanced economies were pouring trillions of dollars into their industrial bases and manufacturing capability, and many nations were drawing explicit links between their economic security and national security.

"We need to be clear-eyed about the economic realities of this decade," he told Australians .

And to understand what he meant, you only need to look around. 

The world's economy is fragmenting

In March, a fascinating paper was published with the title, Are We Fragmented Yet? Measuring Geopolitical Fragmentation and its Causal Effects .

It was written by Jesús Fernández-Villaverde (Professor of Economics at the University of Pennsylvania), Tomohide Mineyama (International Monetary Fund), and Dongho Song (Johns Hopkins University).

It looked at the current state of world economic integration and presented its data in a single "geopolitical fragmentation index".

That index is in the image below. 

Notice how the blue line starts falling from the mid-1990s? 

That reflects how, at that point in history, the global economy was becoming more and more integrated — signalling an "upward trajectory in globalisation".

That coincided with the collapse of the Soviet Union in the early 1990s, the creation of the European Union in 1993, the implementation of the North American Free Trade Agreement (NAFTA) in 1994, the formation of the World Trade Organization (WTO) in 1995, and China's entry into the WTO in 2001.

But that trend changed after the global financial crisis of 2007-09.

And from the mid-2010s, following the European Debt Crisis and Arab Spring, the world economy was fragmenting.

And the fragmentation has continued apace, increasing to its highest level in recent years "without any indication of reversal".

"Brexit, the US-China trade war, the COVID-19 pandemic, Russia's invasion of Ukraine, and the Gaza-Israel conflict, among other events, have strained international relations and have forced many policymakers to rethink the future of their nations' economic strategies," the paper says.

"Similarly, firms are re-evaluating how they operate in a context of increasing geopolitical and trade complexities," it says.

The paper has added to a growing literature on geopolitical fragmentation.

In December last year, IMF First Managing Deputy Director Gita Gopinath warned that "geo-economic fragmentation" was "increasingly a reality".

"If fragmentation deepens, we could find ourselves in a new Cold War,"  she said .

"Yet, even in this new geopolitical reality, policymakers can seek solutions that minimise the costs of fragmentation.

"The focus should be on pragmatic approaches that preserve the benefits of free trade to the extent possible, safeguard solving global challenges, while achieving domestic goals of security and resilience."

Europe's plans for strategic competition

And then there's Europe.

Mario Draghi, the former president of the European Central Bank, is currently working on a plan to revitalise the European Union's economy in the face of stiff competition from the United States and China.

And he gave an important  speech last week , in Brussels, that revealed how his ideas were shaping up.

Here's how he started it:

"For a long time, competitiveness has been a contentious issue for Europe," he said. "In 1994, the Nobel-prize-to-be economist Paul Krugman called focusing on competitiveness a 'dangerous obsession'. His argument was that long-term growth comes from raising productivity, which benefits everyone, rather than through trying to improve your relative position against others and capture their share of growth. "The approach we took to competitiveness in Europe after the sovereign debt crisis seemed to prove his point. "We pursued a deliberate strategy of trying to lower wage costs relative to each other – and, combine this with a procyclical fiscal policy, the net effect was only to weaken our own domestic demand and undermine our social model."

So the misery and waste that resulted from the austerity policies that Europe's leaders forced on their people after the EU's sovereign debt crisis?

Yeah, that was a mistake.

What policymakers should have done instead, in response to their debt crisis, was get EU member states to work together, rather than compete against each other, to improve the region's economic health as a unit.

But Mr Draghi said an important lesson had been learned from that mistake, and he'll soon be proposing "radical change" to the EU so it can meet the new challenges thrown up by our rapidly shifting geopolitical environment.

You can watch his speech below, if you're interested.

In his speech, he noted that strategic competition was on the rise.

He warned the EU's member states would have to work together this time, and move quickly, to secure a place for themselves in the future global order.

"The world is changing rapidly and it has caught us by surprise," he conceded.

"Most importantly, other regions are no longer playing by the rules and are actively devising policies to enhance their competitive position. At best, these policies are designed to re-direct investment towards their own economies at the expense of ours; and at worst, they are designed to make us permanently dependent on them.

"China, for example, is aiming to capture and internalise all parts of the supply chain in green and advanced technologies and is securing the access to the required resources. This rapid supply expansion is leading to significant overcapacity in multiple sectors and threatening to undercut our industries. 

"The US, for its part, is using large-scale industrial policy to attract high-value domestic manufacturing capacity within its borders – including that of European firms – while using protectionism to shut out competitors and deploying its geopolitical power to re-orient and secure supply chains," he said.

He said the EU currently lacked a strategy for how to keep pace in an "increasingly cutthroat race" for leadership in new technologies.

He said if the EU wanted to achieve its climate ambitions without increasing its dependence on countries "on whom we can no longer rely", it would need a comprehensive strategy covering "all stages of the critical mineral supply chain."

"We are currently largely leaving this space to private actors, while other governments are directly leading or strongly coordinating the whole chain," he warned.

"We need a foreign economic policy that delivers the same for our economy.

"The European Commission has already started this process with the Critical Raw Materials Act , but we need complementary measures to make our targets more tangible. For example, we could envisage a dedicated EU Critical Mineral Platform, primarily for joint procurement, secure diversified supply, the pooling and financing, and stockpiling," he said.

In short, Mr Draghi said the European Union's economy would have to be transformed.

"We need to be able to rely on decarbonised and independent energy systems; an integrated and adequate EU-based defence system; domestic manufacturing in the most innovative and fast-growing sectors; and a leading position in the deep-tech and digital innovation that is close to our manufacturing basis," he said.

"But with our competitors moving fast, we must also assess priorities.

"Immediate actions are needed in the sectors with the highest exposure to green, digital and security challenges."

'What price your sneer?'

And as more countries assert their right to restructure their economies to adapt to a rapidly changing global system, we had a reminder last week of how once-mighty countries can be mocked for their poor decision-making.

A couple of days ago, the Economist published an article  on some upcoming changes to Singapore's government.

It noted that Singapore's prime minister, 72-year old Lee Hsien Loong, will be resigning next month after 20 years in power, and he'll be handing the baton to Lawrence Wong, the current finance minister.

It said in Singapore's 59-year history the Republic had only had three leaders, so Mr Wong would be its fourth.

It said after Mr Wong's swearing-in as prime minister, he would soon call a general election, likely later this year.

And it predicted Mr Wong's People's Action Party (PAP) would win that election, like it always does.

It summed things up this way.

"The PAP will win thanks to formidable organisation, unrelenting attacks on the opposition, a docile press, a record of good governance, and a not-always-subliminal message that its survival and that of Singapore are synonymous," it declared.

But the article annoyed Singapore Home Affairs and Law Minister K Shanmugam, who responded by posting some acerbic thoughts on his Facebook page.

They're worth a read.

"The Economist can't resist sneering at us," Mr Shanmugam wrote. "It's an instinct lodged deep in the unconscious of the British commentariat class. They can't stand that a people they were accustomed to lecturing are now doing better than they are, across the board. "Take governance : Deputy Prime Minister Lawrence  will be our 4th PM in 59 years. Meanwhile, in the UK, Mr Rishi Sunak is their 4th PM in 4.9 years. "Mr Boris Johnson, when he was PM, accepted a holiday worth £15,000, and £50,000 for renovations of his residence, from donors. In Singapore, anyone who did what Mr Johnson did would have been charged in court. "Or the economy : We started as a British colony, with a per capita GDP of USD 500. Now, it is more than USD 80,000. "According to a recent Forbes report, we have the fifth highest GDP per capita in the world by PPP (purchasing power parity) terms. Well ahead of the UK. "Or our media : the Economist refers to our "docile press". It obviously prefers a situation like in the UK, where one person can control major media outlets, and have politicians pay court to him, and where media owners can influence who gets elected, and who becomes PM. A similar situation in Australia was described, by a former Australian PM, as a cancer on democracy . "Or in the provision of social services : We provide our people, of all classes and races, with far better healthcare, housing and education. "Or in public safety : the law and order situation in London is well documented. Last year, across England and Wales, investigations into more than 330,000 vehicle crimes (including thefts and break-ins), or 85% of all cases reported, were closed without any suspect caught. In more than a hundred neighbourhoods, 0% of reported car thefts were solved. A situation like that would be unthinkable and unacceptable in Singapore, which has been ranked by Gallup as the safest country in the world since 2015. 95% of adults in Singapore feel safe walking alone at night. "Or in social cohesion : In the UK, a Tory party donor recently said, of a black MP, that looking at her makes him "want to hate all black women". His party said all should just move on from the comments. That's it. In Singapore a person who makes such a comment is likely to be charged in court. "What price your sneer?" he asked.

• X (formerly Twitter)

Related Stories

Do we want australia's economy to become more self-sufficient.

After this week, Albanese government can't be accused of being too cautious

• Business, Economics and Finance
• Economic Globalisation
• Economic Indicator
• Economic Trends
• European Union
• Trade Agreements and Treaties
• United States

Source: Emmanuel Saez and Gabriel Zucman • Note: Tax rates shown include levies paid at all levels of government. Government transfers such as Social Security benefits have not been subtracted.

In the 1960s, the 400 richest Americans paid more than half of their income in taxes. Higher tax rates for the wealthy kept inequality in check and helped fund the creation of social safety nets like Medicare, Medicaid and food stamps.

Today, the superrich control a greater share of America’s wealth than during the Gilded Age of Carnegies and Rockefellers. That's partly because taxes on the wealthy have cratered. In 2018, America's top billionaires paid just 23 percent of their income in taxes.

For the first time in the history of the United States, billionaires had a lower effective tax rate than working-class Americans.

Guest Essay

It’s Time to Tax the Billionaires

By Gabriel Zucman

Gabriel Zucman is an economist at the Paris School of Economics and the University of California, Berkeley.

Until recently, it was hard to know just how good the superrich are at avoiding taxes. Public statistics are oddly quiet about their contributions to government coffers, a topic of legitimate interest in democratic societies.

Over the past few years, I and other scholars have published studies and books attempting to fix that problem. While we still have data for only a handful of countries, we’ve found that the ultrawealthy consistently avoid paying their fair share in taxes. In the Netherlands, for instance, the average taxpayer in 2016 gave 45 percent of earnings to the government, while billionaires paid just 17 percent.

Billionaires avoid taxes outside

the United States, too

United States

Netherlands

Lower earners

0-50th percentile

Middle earners

51-90th percentile

High earners

90-99.99th percentile

Billionaires

Billionaires avoid taxes outside the United States, too

50% total tax rate

Sources: Demetrio Guzzardi, et al., Journal of the European Economic Association; Emmanuel Saez and Gabriel Zucman; Institut des Politiques Publiques; Netherlands Bureau for Economic Policy Analysis

Note: Data is from 2015 for Italy; 2016 for the Netherlands and France; 2018 for the United States.

Why do the world’s most fortunate people pay among the least in taxes, relative to the amount of money they make?

The simple answer is that while most of us live off our salaries, tycoons like Jeff Bezos live off their wealth. In 2019, when Mr. Bezos was still Amazon’s chief executive, he took home an annual salary of just $81,840 . But he owns roughly 10 percent of the company , which made a profit of $30 billion in 2023.

If Amazon gave its profits back to shareholders as dividends, which are subject to income tax, Mr. Bezos would face a hefty tax bill. But Amazon does not pay dividends to its shareholders. Neither does Berkshire Hathaway or Tesla. Instead, the companies keep their profits and reinvest them, making their shareholders even wealthier.

Unless Mr. Bezos, Warren Buffett or Elon Musk sell their stock, their taxable income is relatively minuscule. But they can still make eye-popping purchases by borrowing against their assets. Mr. Musk, for example, used his shares in Tesla as collateral to rustle up around $13 billion in tax-free loans to put toward his acquisition of Twitter.

Jeff Bezos arriving for a news conference after flying into space in the Blue Origin New Shepard rocket on July 20, 2021.

Getty Images

Outside the United States, avoiding taxation can be even easier.

Take Bernard Arnault, the wealthiest person in the world. Mr. Arnault’s shares in LVMH, the luxury goods conglomerate, officially belong to holding companies that he controls. In 2023, Mr. Arnault’s holdings received about $3 billion in dividends from LVMH. France — like other European countries — barely taxes these dividends, because on paper they are received by companies. Yet Mr. Arnault can spend the money almost as if it were deposited directly into his bank account, so long as he works through other incorporated entities — on philanthropy , for instance, or to keep his megayacht afloat or to buy more companies .

Historically, the rich had to pay hefty taxes on corporate profits, the main source of their income. And the wealth they passed on to their heirs was subject to the estate tax. But both taxes have been gutted in recent decades. In 2018, the United States cut its maximum corporate tax rate to 21 percent from 35 percent. And the estate tax has almost disappeared in America. Relative to the wealth of U.S. households, it generates only a quarter of the tax revenues it raised in the 1970s.

The falling U.S. corporate tax rate

Reagan tax cuts

Trump tax cuts

Source: Internal Revenue Service

Note: Tax rates are for each year’s highest corporate income bracket.

So what should be done?

One obstacle to taxing the very rich is the risk they may move to low-tax countries. In Europe, some billionaires who built their fortune in France, Sweden or Germany have established residency in Switzerland , where they pay a fraction of what they would owe in their home country. Although few of the ultrawealthy actually move their homes , the possibility that they might has been a boogeyman for would-be tax reformers.

There is a way to make tax dodging less attractive: a global minimum tax. In 2021, more than 130 countries agreed to apply a minimum tax rate of 15 percent on the profits of large multinational companies. So no matter where a company parks its profits, it still has to pay at least a baseline amount of tax under the agreement.

In February, I was invited to a meeting of Group of 20 finance ministers to present a proposal for another coordinated minimum tax — this one not on corporations, but on billionaires. The idea is simple. Let’s agree that billionaires should pay income taxes equivalent to a small portion — say, 2 percent — of their wealth each year. Someone like Bernard Arnault, who is worth about $210 billion, would have to pay an additional tax equal to roughly $4.2 billion if he pays no income tax. In total, the proposal would allow countries to collect an estimated $250 billion in additional tax revenue per year, which is even more than what the global minimum tax on corporations is expected to add.

Bernard Arnault watching the men’s singles final at the French Open on June 8, 2014.

Abaca Press

Critics might say that this is a wealth tax, the constitutionality of which is debated in the United States. In reality, the proposal stays firmly in the realm of income taxation. Billionaires who already pay the baseline amount of income tax would have no extra tax to pay. The goal is that only those who dial down their income to dodge the income tax would be affected.

Critics also claim that a minimum tax would be too hard to apply because wealth is difficult to value. This fear is overblown. According to my research, about 60 percent of U.S. billionaires’ wealth is in stocks of publicly traded companies. The rest is mostly ownership stakes in private businesses, which can be assigned a monetary value by looking at how the market values similar firms.

One challenge to making a minimum tax work is ensuring broad participation. In the multinational minimum tax agreement, participating countries are allowed to overtax companies from nations that haven’t signed on. This incentivizes every country to join the agreement. The same mechanism should be used for billionaires. For example, if Switzerland refuses to tax the superrich who live there, other countries could tax them on its behalf.

We are already seeing some movement on the issue. Countries such as Brazil, which is chairing the Group of 20 summit this year and has shown extraordinary leadership on the issue, and France , Germany, South Africa and Spain have recently expressed support for a minimum tax on billionaires. In the United States, President Biden has proposed a billionaire tax that shares the same objectives.

To be clear, this proposal wouldn’t increase taxes for doctors, lawyers, small-business owners or the rest of the world’s upper middle class. I’m talking about asking a very small number of stratospherically wealthy individuals — about 3,000 people — to give a relatively tiny bit of their profits back to the governments that fund their employees’ educations and health care and allow their businesses to operate and thrive.

The idea that billionaires should pay a minimum amount of income tax is not a radical idea. What is radical is continuing to allow the wealthiest people in the world to pay a smaller percentage in income tax than nearly everybody else. In liberal democracies, a wave of political sentiment is building, focused on rooting out the inequality that corrodes societies. A coordinated minimum tax on the superrich will not fix capitalism. But it is a necessary first step.

More on tax evasion and inequality

This Is Tax Evasion, Plain and Simple

By Gabriel Zucman and Gus Wezerek

The Tax Pirates Are Us

By Binyamin Appelbaum

How to Tax Our Way Back to Justice

By Emmanuel Saez and Gabriel Zucman

The Times is committed to publishing a diversity of letters to the editor. We’d like to hear what you think about this or any of our articles. Here are some tips . And here’s our email: [email protected] .

Follow the New York Times Opinion section on Facebook , Instagram , TikTok , WhatsApp , X and Threads .

Gabriel Zucman is an economist at the Paris School of Economics and the University of California, Berkeley, and a co-author of “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay.”

• Share full article

Advertisement

Global meta-analysis quantifies benefits of cover crop use

Researchers at the Indiana University School of Science in Indianapolis compiled data from more than 100 field trials across the globe and found that cover crops have a net-positive impact, overall increasing crop yield by 2.6% globally. Standing out among the findings was how substantially yields benefited from the use of legumes as cover crops, including peas, vetch and clover.

Yu Peng , a Ph.D. student in the School of Science, led a comprehensive study using literature synthesis and meta-analysis to quantify the results of the data gathered. Peng and his team collected over 1,000 records of field-based yield data and analyzed how cover crop type, soil texture, soil water conditions, aridity, cover crop duration and other management practices impact crop yield.

“Studying in Indiana, surrounded by a rich agricultural heritage, I’ve witnessed firsthand challenges faced by farmers, including soil degradation and nutrient loss,” Peng said. “This research aims to boost the adoption rate of cover crops by addressing farmer concerns about potential yield loss in the main crop, thereby benefiting agro-environments.”

Leguminous cover crops showed a 9.8% yield increase compared to non-leguminous cover crops — like rye, oat, canola and mixture cover crops — which showed no statistical significance. Additionally, introducing leguminous cover crops without fertilizing main crops resulted in a 21.8% yield increase.

Corn, the most produced crop in the Midwest and the U.S., is one of two crops that benefit most from any kind of cover cropping, with an increased yield of 4.7%. Barley, another major U.S. crop, saw the most improved yield at 8.3%. Data suggests that by using leguminous cover cropping, yields could be even higher.

Researchers discovered that cover crops have the most benefit under nutrient-limited conditions. For instance, rainfed drylands had an increased yield from cover crops, whereas rainfed non-drylands saw no significant impact. Additionally, a 10.5% yield increase was observed when fertilizer wasn’t used alongside cover cropping, but the yield increase dropped to 1.8% when combined with fertilizer treatment.

Coarser soils like sandy loam and loamy sand tended to increase yields under cover cropping. Conversely, fine-textured soils like clay-loam and clay soils saw a reduction under cover cropping, negatively impacting yield.

“Not every cover crop is suitable for every field management practice in every environment,” Peng said. “My hope is this article leads to increased adoption and smarter cover cropping methods by offering comprehensive guidance in choosing optimal cover crop strategies based on their objectives, including the type of cover crops to use, which management practices to combine with and considerations of local meteorological factors.”

Cover crops control soil erosion, increase soil moisture, improve soil structure and increase organic matter. Lixin Wang , a professor in the Department of Earth and Environmental Sciences and corresponding author on the study, said he hopes this work encourages more widespread adoption of cover crops, not only for the benefits it provides farmers but also for Earth’s environment.

“Agriculture leaves a large environmental footprint,” Wang said. “Often, it pollutes water and produces plenty of greenhouse gases. That’s why we want to minimize the environmental impact while also ensuring we have a sufficient crop yield. We believe cover crops are a potential tool to help achieve this.”

Agriculture is a vital part of Indiana’s economic health. It’s estimated that farming contributes $35.1 billion to Indiana’s economy yearly. Farmland covers two-thirds of the state’s total acreage. But according to data from the Indiana State Department of Agriculture , less than 10% of Indiana farmers plant cover crops.

“After providing scientific evidence to farmers that using cover crops will benefit the environment without yield loss, the next frame explores what else it can contribute to,” Peng said. “During my research, I always thought ‘You plant your corn and harvest it, but what else is there to think about?’ Greenhouse gases could be one answer.

“If cover cropping proves effective in mitigating greenhouse gas emissions, it suggests that farmers could fight against global warming through a cost-effective and widely replicable approach.”

School of Science faculty member Pierre-Andre Jacinthe , who has years of experience studying biogeochemistry, hydrology and soils, and Wei Ren of the University of Connecticut also contributed to the report. This research is supported by a four-year United States Department of Agriculture grant awarded to Wang, Jacinthe and Ren, and was published in the journal Field Crops Research .

Filed under:

More stories.

Indianapolis campus welcomes inaugural chancellor

When it all lines up: Meet IU Northwest’s ‘eclipse experts’

Social media.

• Facebook for IU
• Linkedin for IU
• Twitter for IU
• Instagram for IU
• Youtube for IU

Additional resources

Indiana university.

• About Email at IU
• People Directory
• Non-discrimination Notice
• Email Newsletters & Press Releases

Numbers, Facts and Trends Shaping Your World

Read our research on:

Full Topic List

Regions & Countries

• Publications
• Our Methods
• Short Reads
• Tools & Resources

Read Our Research On:

Growing Partisan Divisions Over NATO and Ukraine

2. americans’ opinions of nato, table of contents.

• NATO and trans-Atlantic relations
• A shifting balance of global power
• International engagement and foreign policy issues
• Views of U.S. support to Ukraine
• Concerns about Russia taking over Ukraine, invading other countries
• Impact of supporting Ukraine on U.S. national security
• Confidence in Zelenskyy
• Views of NATO
• U.S. membership in NATO
• NATO’s influence in the world
• Americans’ knowledge of NATO
• Views of the UK, France and Germany
• Views of British, French and German power
• Trans-Atlantic relations
• European defense spending
• Confidence in Putin
• Attitudes toward Russia
• Russia’s influence in the world
• Russia as an enemy, competitor or partner of the U.S.
• Acknowledgments
• The American Trends Panel survey methodology

Here are several key takeaways when it comes to Americans’ opinions of NATO:

• Americans continue to hold a largely favorable view of NATO, with a majority expressing a positive opinion of the alliance. However, ratings have dipped slightly over the past year, driven largely by declining favorability among Republicans and Republican-leaning independents.
• About two-thirds of U.S. adults see a benefit to NATO membership, but fewer say this today than in 2022. This change has also largely occurred among Republicans.
• The share of Americans who believe the alliance’s influence is getting stronger dropped 11 percentage points over the past two years , with similar declines among both Democrats and Republicans.
• Those who have more knowledge of NATO are more inclined to see the organization favorably.

While a majority of Americans (58%) have a favorable opinion of NATO, positive views of the alliance dropped 4 points – a statistically significant decline – since this question was last asked in 2023.

The well-established partisan divide on views of NATO has grown wider in 2024. Republicans have become less favorable of the alliance over the past year: 43% have a positive view of NATO, down from 49% who said the same in 2023. Meanwhile, Democrats and Democratic-leaning independents remain positive about NATO into 2024: Three-quarters of this group see the alliance in a favorable light (comparable to 76% in 2023).

Those with at least a four-year college degree are more likely than those with less education to express a positive opinion of NATO, though those with less education are slightly less likely overall to offer an opinion.

Americans who say security and defense ties are important for strong relations between the U.S. and Europe are almost twice as likely to have a favorable view of NATO when compared with those who do not consider security ties to be important (60% vs. 33%).

Views of U.S. support for Ukraine are also linked to opinions about NATO. About eight-in-ten U.S. adults (82%) who believe the U.S. is not providing enough support to Ukraine have a favorable opinion of NATO, compared with 34% favorability among those who say the U.S. is providing too much support.

About two-thirds of Americans (66%) say membership in NATO benefits the U.S., compared with 31% who believe it does not. The share who see a benefit has dropped slightly, from 69% in 2022.

Of the three multilateral organizations asked about in the survey (NATO, the United Nations and the World Health Organization), the U.S. public sees NATO membership as most beneficial. In comparison, 60% say UN membership benefits the country, and 58% say the same about WHO membership.

Related: Fewer Americans view the United Nations favorably than in 2023

The partisan divide seen in overall views NATO is present here as well: 81% of Democrats say the U.S. benefits from being a member of NATO, while 51% of Republican say the same. Liberal Democrats are more likely than any other ideological group to see a benefit to NATO membership.

Additionally, those who think shared security and defense ties are important for strong relations between the U.S. and Europe are much more likely to believe the U.S. benefits from NATO membership than those who do not think these ties are important.

The share in the U.S. who see NATO’s influence in the world as getting stronger declined 11 percentage points since this question was last asked in May 2022, after Russia’s invasion of Ukraine. Only 23% of Americans believe NATO’s influence is getting stronger. Meanwhile, 45% say its influence is staying about the same, up from 39% in 2022. And 28% believe the alliance is getting weaker, a slight increase from the 25% who said the same two years ago.

Democrats have been consistently more likely than Republicans to say NATO’s influence in the world is getting stronger.

Americans have a varying level of knowledge about where NATO members are located, the organization’s central focus and Ukraine’s nonmember status. A majority (56%) can correctly identify Europe and North America as the two regions from which the alliance draws membership. And about half (51%) recognize promoting the security of its members as a central tenet of the alliance. Fewer (41%) are able to correctly identify Ukraine as a nation that is not a member of NATO.

Overall, 30% of Americans answered all three NATO knowledge questions correctly. About a fifth each answered two correctly (19%) or one correctly (20%). And 31% of U.S. adults did not answer any question correctly (including the share who chose “Not sure” at least once alongside incorrect answers).

Americans ages 65 and older are 20 percentage points more likely than those ages 18 to 29 to answer all three NATO knowledge questions correctly (38% vs. 18%). Previous Center research has found that older adults tend to have more knowledge of international affairs than their younger counterparts.

Americans with more education are more likely than those with less to answer all three questions correctly: Half of those with a postgraduate education gave three correct answers, compared with 17% of those with a high school education or less.

Notably, Democrats and Republicans were equally likely to answer all three questions correctly.

People who knew more about NATO tended to have different views of the alliance than those who did not know as much about it. For example, 73% of those who answered all three quiz questions correctly believe the U.S. benefits from NATO membership, compared with 57% of those who answered no questions correctly.

Additionally, a higher share of those who gave three correct answers have a favorable view of NATO (68%), compared with 46% of those who gave no correct answers. Respondents with a higher level of NATO knowledge are also more likely to say the organization’s influence is on the rise.

Sign up for our weekly newsletter

Fresh data delivery Saturday mornings

Sign up for The Briefing

Weekly updates on the world of news & information

• Global Balance of Power
• Global Image of Countries
• Partisanship & Issues
• Political Issues
• Vladimir Putin
• War & International Conflict

What Are Americans’ Top Foreign Policy Priorities?

Large shares see russia and putin in negative light, while views of zelenskyy more mixed, americans hold positive feelings toward nato and ukraine, see russia as an enemy, how young adults want their country to engage with the world, what public opinion surveys found in the first year of the war in ukraine, most popular, report materials.

1615 L St. NW, Suite 800 Washington, DC 20036 USA (+1) 202-419-4300 | Main (+1) 202-857-8562 | Fax (+1) 202-419-4372 |  Media Inquiries

Research Topics

• Age & Generations
• Coronavirus (COVID-19)
• Economy & Work
• Family & Relationships
• Gender & LGBTQ
• Immigration & Migration
• International Affairs
• Internet & Technology
• Methodological Research
• News Habits & Media
• Non-U.S. Governments
• Other Topics
• Politics & Policy
• Race & Ethnicity
• Email Newsletters

ABOUT PEW RESEARCH CENTER  Pew Research Center is a nonpartisan fact tank that informs the public about the issues, attitudes and trends shaping the world. It conducts public opinion polling, demographic research, media content analysis and other empirical social science research. Pew Research Center does not take policy positions. It is a subsidiary of  The Pew Charitable Trusts .

Copyright 2024 Pew Research Center

Terms & Conditions

Privacy Policy

Cookie Settings

Reprints, Permissions & Use Policy

• open search

From the latest big breakthrough to the most influential and inspiring figures on campus to Pitt in the community, Pittwire is your official source for what’s happening now.

• Health and Wellness
• Technology and Science
• Arts and Humanities
• Community Impact
• Diversity, Equity, and Inclusion
• Innovation and Research
• Our City/Our Campus
• Pitt Magazine
• Features & Articles
• Accolades & Honors
• Ones to Watch
• Announcements and Updates
• Life at Pitt
• Arts & Sciences
• Computing & Information
• Dental Medicine
• Engineering
• General Studies
• Health & Rehabilitation
• Honors College
• Public & Intl Affairs
• Public Health
• Social Work
• COVID-19 Response
• Sustainability
• Undergraduate students
• Kenneth P. Dietrich School of Arts and Sciences

Subscribe to Pittwire Today

These students were published in the journal of science policy and governance.

Undergraduate students in the University of Pittsburgh’s spring 2023 Environmental Law and Policy class published papers in the April issue of the Journal of Science Policy and Governance.

The class’ goal was for students to identify a science policy problem and create something new in recommending potential solutions. The teams of students in environmental studies, environmental science and other Pitt majors were published alongside graduate students, post-doctoral researchers and faculty from highly ranked science departments, medical schools and policy programs.

Yasmine Florent, Mackenzie Nemoto, Ana Rowley, Vanessa Pratt and recent graduate Maria Isabel Villegas (A&S ’24) wrote “Dangers of Oxybenzone in Sunscreens on Coral Reefs: Proposed Policy Approaches.” The second paper, “Mitigating the Invasive Method of Hydraulic Fracturing Through a Phase Out Policy Plan,” was written by Ashlynn Moretti, Madilyn Cianci, Mina Kimak and Savannah Johns (A&S ’23).

Employees, benefits open enrollment is May 1-15

Pitt is launching an office of sustainability in the health sciences, help shape pitt it’s 10-year horizon plan.

Global Financial Crimes GFC Investigator

Job Description:

At Bank of America, we are guided by a common purpose to help make financial lives better through the power of every connection. Responsible Growth is how we run our company and how we deliver for our clients, teammates, communities and shareholders every day.

One of the keys to driving Responsible Growth is being a great place to work for our teammates around the world. We’re devoted to being a diverse and inclusive workplace for everyone. We hire individuals with a broad range of backgrounds and experiences and invest heavily in our teammates and their families by offering competitive benefits to support their physical, emotional, and financial well-being.

Bank of America believes both in the importance of working together and offering flexibility to our employees. We use a multi-faceted approach for flexibility, depending on the various roles in our organization.

Working at Bank of America will give you a great career with opportunities to learn, grow and make an impact, along with the power to make a difference. Join us!

Job Description: This job is responsible for performing end-to-end investigations or investigations support functions of external financial crimes activities across one or more lines of business. Key responsibilities include conducting routine to complex investigations, including fraud committed by external parties, money laundering, or terrorist financing and acting as the liaison to Law Enforcement as required.

This role will entail completing investigations while ensuring cases meet or exceed closure and quality metrics, reporting facts of the investigation to assist in identifying potential operational or compliance risks, and completing Suspicious Activity Reports (SAR) in a timely and accurate manner for submission to regulators and/or law enforcement.

This role may ultimately report to any number of investigations teams across the consumer or client managed lines of business, as well as roles filled within specialized investigations. An Investigator may be asked to partner with GFC Risk Management, front line units or other stakeholders to resolve investigations. The Investigator will maintain a working knowledge of the Bank Secrecy Act (BSA), USA PATRIOT Act, Anti-Money Laundering efforts, Office of Foreign Assets Control (OFAC) and awareness of industry best practices.

Activities performed by this role may include, but are not limited to:

Managing a significant case inventory while prioritizing cases based upon risk and/or management direction while adhering to department Service Level Agreements (SLAs)

The Investigator will perform research and analysis of transaction information, customer data, public records, social media platforms or other external research tools to aide in the investigation to determine whether the activity appears to be normal for the client type.

The Investigator is responsible for preparing concise reporting that captures the investigative details that support their decision.

The Investigator completes Suspicious Activity Reports (“SAR”) in a timely and accurate manner for submission to regulators and law enforcement.

The Investigator communicates with GFC Management, front line units or other internal stakeholders, and law enforcement to obtain additional information and documentation as needed to resolve investigations.

The Investigator recommends appropriate follow-up and possible account closure for customers that exceed the Bank's risk tolerance; and identifies and escalates potential operational or compliance risks.

The Investigator performs quality control functions, training, communications, guidance, monitoring scenario development/enhancement input and testing, or law enforcement liaison responsibilities in an investigative support role.

Flexible to perform other functions as requested by management.

The selected candidate will have:

Minimum one year experience with, AML, Risk, or Compliance experience and/or knowledge of financial crimes typologies

BSA knowledge relative to AML

Proficiency in Microsoft Excel / data analytics.

FINRA licenses including the SIE or Series 7, Series 4, Series 24, as well as experience in Law enforcement and/or interacting with law enforcement and/or bi-lingual (Spanish, Russian, Chinese/Mandarin, and/or Farsi a plus.

Responsibilities:

Completes investigations while overseeing cases meet or exceed closure and quality metrics

Completes Suspicious Activity Reports (SAR) in a timely and accurate manner for submission to regulators and/or law enforcement

Reports facts of the investigation to senior stakeholders, assisting in identifying potential operational or compliance risks and partners with Global Financial Crimes (GFC) Management and/or Front Line Units (FLU) to resolve investigations

Performs quality control functions, training, communications, guidance, monitoring scenario development/enhancement input and testing, or law enforcement liaison responsibilities in an investigative support role

Critical Thinking

Fraud Management

Regulatory Compliance

Written Communications

Investigation Management

Policies, Procedures, and Guidelines Management

Risk Management

Issue Management

Talent Development

Required Qualifications:

Minimum years business and functional experience: 5 Years

Degree required: Bachelor’s or equivalent experience

Desired Qualifications:

Additional technical/functional experience (e.g., Industry type): Financial Services and/or related government entity

Certifications: ACAMS - Association of Certified Anti-Money Laundering Specialists

Hours Per Week:

Weekly Schedule:

Referral Bonus Amount:

Hours Per Week: 

Learn more about this role

JR-24017594

Manages People: No

Street Address

Primary location:, additional locations:, important notice: you are now leaving bank of america.

By clicking Continue, you will be taken to a website that is not affiliated with Bank of America and may offer a different privacy policy and level of security. Bank of America is not responsible for and does not endorse, guarantee or monitor content, availability, viewpoints, products or services that are offered or expressed on other websites.

You can click the Return to Bank of America button now to return to the previous page or you can use the Back button on your browser after you leave.