To continue with, by getting into a group of more "technologically developed" countries and companies, firms can benefit in improving their production. More specifically, by integrating with larger companies, firms incorporate better technological equipment. As a result, firms can produce more efficiently and hence, enhance their profits. At this point it would be useful to mention the phenomenon of "government subsidizing". When a government notices a decrease in the country's GDP i.
In that way, companies will become increase their popularity and eventually become multinational. However, it is of great importance for firms to obey to specific criteria in order for them to be in fact considered "multinational".
It is true, that the improvement of technological equipment, transportation of products and development of production processes and communications play a great role in the consideration of a company as "multinational". Jacoby proposes that a multinational corporation evolves from six stages. The first stage is exporting its products to foreign countries. In fact, when a country wants to get involved with another country's market market share , the government of the first country subsidizes a small company in the second country country of interest so as to increase its incomes.
This phenomenon is called joint venture exporting and can be more specifically described as the procedure of producing goods in one country and selling them in another one.
This procedure is linked to the first stage Jacoby described. Following the procedure of exporting, firms become multinational, increasing their profits and contributing to the outcome of the world's economy and GDP. The second stage involves establishing sales organizations abroad.
The next stage involves "Licenses use of its patent and know-how to foreign that make and sell its products". This process is called "licensing" and it can be the procedure of "when a company offers the right to trademark patent, trade secretor other similarity calued items of intellectual property in return for a royalty or a fee".
The fourth stage includes "establishing foreign manufacturing facilities". The fifth stage involves "multinationalizes management from top to bottom" and the last one "multinationalizes ownership to corporate stock".
Finally, firms tend to become multinational by establishing an "Internet Encarta". As Quelch and Klein argue: To conclude, economic globalization is a thriving phenomenon of the past century and has greatly influenced the world's economy. Indeed, an aspect of economic globalization is the development of firms into multinational companies.
Nowadays, it has been observed that more and more companies aim in exporting their products and augmenting their costumer database. Either by establishing an Internet Encarta or franchising, firms aim to increase their profits while at the same time they contribute in the construction of a global marketplace and the increase of the world's GDP. Also, firms that become multinational, increase the global sales and the size of the market.
As a result, customers around the world have a greater variety of products to chose from and therefore, increase any firms' income. Furthermore, cheap labour and cheap raw materials attract the owners of firms since they lead to reduce unit costs, which again results into an overall profit of the specific firm.
Moreover, the production increases and becomes more efficient since firms start getting involved with a group of more "technologically developed" companies, when cooperating with multinational companies. The multinalization of firms may seem superficial by means of cultural or social aspects, but in fact, it is not. As Drucker mentions, we live in a world of "Social Transformation"; making firms multinational directly involves integration of countries, cultures and civilizations.
Therefore, the multinationalization of firms, contributes in the coalition of countries, cultures, habits and people to result into a global and unified community. Therefore, economic globalization not only serves social purposes but also economic ones.
It is the main and most crucial reason for economy and financial flow amongst countries. Essay UK - http: If this essay isn't quite what you're looking for, why not order your own custom Economics essay, dissertation or piece of coursework that answers your exact question? There are UK writers just like me on hand, waiting to help you. Each of us is qualified to a high level in our area of expertise, and we can write you a fully researched, fully referenced complete original answer to your essay question.
However, the performance of India in respect of service sector exports was comparatively better during the same period. However, major position of the increase in services exports was realised from software exports.
Thus the share of software exports out of total services exports of India increased from But if we compare the export performance of India with that of China, South Korea and even Mexico, the achievement attained by India cannot be considered significant. Similarly, South Korea and Mexico had also shown significant improvement in its share of World exports from 1.
But the export performance of the country would have been improved further if the globalizers did not followed the policy of protection on some cheap pretext like declaring Indian skirts as inflammable by USA, banning of azo dyes, imposition of anti-dumping duties etc. Thus such act of protectionism has been hitting our textile industry considerably. Moreover, linking of labour standards with trade by the developed countries like USA on the pretext of use of child labour has also compounded the problem of exports in India.
But multinational companies MNCs , especially from USA, having been in advantageous position in telecommunications, insurance sector etc.
Globalizers were of the view that Indian exports would increase at faster rate than that of imports. Unfortunately, things are not moving in that direction. Indian exports which was 7. But the volume of imports in India as percentage of GDP rose from 8.
This shows how the access to foreign markets by Indians is growing slowly as compared to the entry of foreigners in our domestic market. But the same deficit declined to 2. But in , the same trade deficit increased considerably to 5.
This simply shows that the access of Indian markets by the foreign producers has been increasing. In-spite of high expectation that globalisation would facilitate attaining of higher GDP growth rate through export-led growth but that expectation has failed to materialize. Although in the initial years of globalisation, the GDP growth rates gradually rose from 5.
Thus the sluggish GDP growth rates experienced by Indian economy has reflected the failure of the policy of globalisation introduced in the country in raising its GDP growth rates and also raised its dependency burden on world economy. However, the GDP growth rates in India started to show an increasing trend in recent years, i.
The advocates of globalisation has been claiming that globalisation would pave the way for greater inflow of foreign investment. But things are not moving in a right direction. Foreign investment usually enters in two forms—Foreign direct investment and Foreign Portfolio investment.
However, the FDI enhances the productive capacity and investment of the country but the portfolio investment encourages speculation activities. During the period to , the share of FDI was During the subsequent period, i. Again during the period to the share of FDI has again declined to During the next 6 — year period, i. Moreover, from the year-wise data of foreign investment as shown in table no.
It is observed from Table Thus the flow of FPI shows an erratic behaviour. Thus in recent years, the proportion of FPI in total foreign investment is still very high. Thus the expectation of the country in respect of entry of foreign investment as a result of globalisation has not been fulfilled.
Moreover, there is a peculiar tendency where there remains a wide gap between the level of foreign investment approved and its actual inflow. Reduction of poverty is one of the important objectives of development. But in modern times the pace of poverty reduction is gradually slowing down. The main findings of this model is that the rate of poverty reduction in the s is slightly less than that of s.
The reason behind this slow pace of poverty reduction is the pattern of growth that has been achieved following the policy liberalisation, privatisation and globalisation. Such a growth pattern has affected geographical distribution. The globalisation has helped the industrially advanced states much more than the less industrialised states and also neglected agricultural sector leading to a skewed pattern of distribution in this post-reform period.
Thus the paradox of attaining higher growth rate of GDP and lower rate of poverty reduction is mostly resulted from unequal distribution of income between the richer section and the marginalized section of the population. Besides, this slow decline in poverty reduction is mostly resulted from the geographical pattern of growth promoted by the policies of liberalisation, privatisation and globalisation. As a result of globalisation industrialised states are getting more benefit as compared to that of less industrialised and agriculturally based states leading to a geographical skewed pattern of growth attained during this post-globalisation period.
Thus globalisation has been resulting in widening inequality, growing concentration of wealth and slowing down rate of poverty reduction in the country. Globalisation has resulted in a fall in the employment growth rates. The annual growth rate of employment which was 2. As a result, the unemployment growth rates increased from 5.
This was despite the fall in the growth rate of labour force from 2. Such a situation is mostly resulted from the deceleration in employment growth rates in agriculture and community and personal services.
These two sectors contributed jointly around 70 per cent of total employment generated but they virtually failed to record any growth in employment. Thus after making a review of performance of the economy for a decade after the introduction of globalisation, it is observed that the policy of globalisation has not been able to bring the required benefits to the people in general in terms of basic macro indicators such as GDP growth rates, employment generation, reduction of poverty, hike in investment, boost in merchandise exports.
It is only in respect of services export India has been able to record marginal gain due to its cheaper manpower resources. Moreover as a result of globalisation, a good number of small and medium scale enterprises had to face closure due to unequal competition leading to loss of employment to a good number of workers engaged in these industrial units. Thus globalisation has also failed to look fairly at the small enterprises, rural and informal sectors from where majority of people earn their livelihood.
Thus under the present scenario, important steps need to be taken for integrating the growth objective with that of employment objective. In its study on the progress of the corporate sector in recent years, the Institute for Studies of Industrial Development ISID has reported the impact of growth of top TNCs in the post-reform period.
It is further observed that the annual growth rate of profits before tax of these top TNCs during the period to was Such enormous profits earned by TNCs will create an adverse impact on the balance of payments. While the exports to turn over ratio of these companies grow slowly from 8. Accordingly, such workings of the TNCs has converted a net export position of Rs crore in to a net import position of Rs 1, crore in In respect of agriculture, there is also a threat to the Indian farmers from the trading provisions of WTO.
Here the main fear is that with the implementation of WTO agreement and trading provisions, Indian market will be flooded with different farm goods from foreign countries at a rate much lower than that indigenous farm products leading to a death-blow to Indian farmers.
Here the apprehension of Indian farmers cannot be ignored. Countries like Australia, Canada, USA and New Zealand which have a large farm potential along with necessary resources to provide subsidies and improved farm management, will be in a advantageous position to market their farm products in a developing country like India, which are maintaining lesser efficiency and lower productivity at their farm activities.
This would naturally result unequal competition for the Indian farmers in respect of both price and quality. The other area of concern of farmers related to patenting and sale of seeds and conditionality of self- grown seeds are met satisfactorily.
We have seen that there are still some active threats to Indian agriculture and indigenous industrial units from the WTO commitments implemented by the Government. In this connection, Mr. Obviously, competition between a developing country and developed countries can hardly be on a level-playing field, whatever the so called safeguards and assurances. How much damage will be caused and the consequences of global competition will be known when all the provisions of the treaty obligations are fulfilled.
But adoption of MAI by WTO will provide unrestricted power to MNCs for exploiting resources of developing countries so as to extend their hegemony in various developing countries. They also want to invade the economies of developing countries by adopting the path of globalisation. Thus such draft on MAI completely demolishes the concept of economic sovereignty of nations and extended the concept of neo-imperialism.
Considering the present trend of threat appearing out of globalisation, Indian industrial firms, who initially welcomed the multi-nationals, have now started to develop second thoughts on unrestricted entry of foreign capital. Thus a consensus is now being emerged that free and whole sale globalisation should be replaced by a selective path of globalisation, giving due weightage to the national interest.
In this connection, former Prime Minister I. But they will not be allowed to drown us and take over Indian Companies. They will be allowed to invest in sectors where we need them……..
Essay on Welfare Economics.
Globalization has to its identity social, economic, and political reforms,.however the globalization that we are about to discuss is the term that combines the past socio-economic and political reforms and cross with them to the world where their are no boundaries, restrictions, and immobilization what Mittelman describes as. cross-border flows of capital, knowledge, and consumer goods.
Effects Of Economic Globalization essays From the day when I first learned the term globalization it has been a topic that has captured my interests. This country gains while the other looses, these people thrive while others are less fortunate, technology moves in and forces human labor out, and.
Economic globalization is the process of increasing the financial integration amongst countries. Consequently, economic globalization leads to the development of a . In this essay, globalization will be defined and what I believe to be at its core and what the major results of globalization are. At the political and economic level, globalization is the process of denationalization of markets, politics and legal systems.
May 09, · Economic globalization has voluminous positive influences on international security as well. The most important effect of economic globalization is that it curbs the authority of state. It also reduces states’ dependence on military based security and . Economic Globalization and Organization Development Essay. Globalization of the economy refers to the integration of the world economies whereby economies in the world are become more interdependence. This economic development is being achieved through cross-border movement of capital, services, goods, and technology.