Question

Discuss the nature of and factors contributing to the globalizing economy

Answer 1

Economies of Scale- Most analysts assume the Minimum Efficient Level (MES) associated with other sectors has risen. If the MES is growing, so a domestic market can be deemed too limited to satisfy such industries' sales needs. Many developing markets with their own transnational companies

Disparities in tax structures Enterprises' ability to take advantage of lower unit labour rates and other advantageous development factors abroad has prompted markets to change their tax laws to draw foreign direct investment. In a attempt to attract lucrative international investment contracts, several countries have been interested in tax war between themselves.

Less protectionism Old forms of non-tariff protection such as import licenses and restrictions on foreign exchange have been slowly repealed. Borders have been opening up and average tariff rates for imports have dropped. That said, it is worth knowing that non-tariff barriers such as import quotas have risen in recent years, as countries have struggled to achieve real economic growth and as a response to persistent trade and current-account deficits