The effects on industrialized nations due to the growth in newly industrialized countries.

Expert Solution

The effects on industrialized nations due to the growth in newly industrialized countries are as follows-

Increase in trade imbalance- Due to the growth of newly industrialized countries, larger amount of cheaper finished goods are available in the market which impacts the trade balances of already industrialised nations as consumers will shift their preferences to cheaper substitutes.
Negative consumer externality- The growth of new industrialized countries will just add to the existing environmental pollution and effect the societal welfare of nations as a whiole. Lesser reources will be available for the already established industrialized nations as most of it will be consumed by the newly industrialised nations(who were earlier large exporters of raw materials) at better cost benefits.
Increased global competition- The global comepetition will increase as a result of entry of this newly industrialised nations in the global markets, which will in turn limit the existing market power of the industrialised nations and decrease the overal economic profits of these nations.
Economic risks- It might cause an economic risk for the industrialised nations by adversely affecting its operations globally and impacting its property rights, economies of scale and exxhange rates, et al.

Rahul Sunny answered 8 months ago

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The effects on industrialized nations due to the growth in newly industrialized countries.

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