Question

What are the implications of the globalization of markets and the globalization of production? in 1-2 pages explain and provide examples. (donot copy/paste) must be at-least 1 page.

Answer 1

Globalization:

Globalization is a process of interaction among different countries, people and corporates across the world.

The implications of globalization on the market is both positive as well as negative. The positive implications are as follows:

1. Globalization has made the trade possible and also made tariff free among the group countries of trade member organization. For example, NAFTA i.e. North American Free Trade Agreement is a treaty among three countries the United States, Canada, and Mexico.

2. The Movement of labor is free flowing due to unrestricting legal policies. Hence the greater movement of labor is possible.

3. It has the major role in increment of capital flows.

4. The trade is possible from anywhere to any country without any big establishments. Hence, gave a chance to multinational companies to grow.

5. The globalization brings the integrity to global trade cycle. The effective or uniform code of conducts allows the business to do ethical trades.

1. The cost of resources, communication and transportation also reduced due to globalisation. Hence, it in turn reduces eth business cost.
2. The globalisation has reduced the barrier between countries by increasing communication and improving transport.
3. Globalisation brings the new talent easier access.

All the impacts implies that the market is free to entry and exit. The market conditions decides the competition among the players. The market would easier to reach from any corners of the country. The enrichment of market possible due to new innovations. It actually develops the under developed Market places.

Some negative implications of globalisation are also present in the market such as

1. The globalisation has created a pressure on the small traders.

2. It has increased corruptions and unethical practices.

3. It has created inequality of income across the world.

4. Integration of market has created the market power in hand of high profile businesses. Hence, a monopoly situation is created in market.

All negative implications on the market are income disparity is present in the market. The business is somewhat monopoly. This has increased the corruption in the market.

Globalisation of Production:

Globalisation of production reduces the cost of production. This in turn comes up with lower average costs. Once the average cost is lower than the price of product is also lower for consumers. The domestic monopolies exits as the business is dependent on the local market. The cost and quality of factor of productions as well as products has increase to much higher extent before the process of globalization.