Describe how globalization has affected the world economy and how it has affected your own home country. Use at least six peer-reviewed sources for each theory.
Sample Solution
Globalization has had a significant effect on the world economy. It refers to the increased integration of international markets, businesses and societies and entails increased flows of capital, goods, services, labor and people worldwide. Globalization has enabled countries to access new products and technologies that have improved their standards of living as well as increase economic growth. The phenomenon has been both beneficial and detrimental in various ways depending on a country’s particular socio-economic context.
The most noted benefit of globalization is an increase in economic efficiency due to lower production costs associated with global trade such as eliminating tariffs or deregulating trade barriers (International Monetary Fund). Companies are now able to source materials from different parts of the world at lower prices which decrease product costs for consumers leading to higher purchasing power. Furthermore, global competition encourages firms to adopt better management practices which can lead to improved quality of products offered in local markets (Capital Economics Ltd). In addition, globalization increases foreign direct investment between countries resulting in job creation both locally and abroad (World Bank).