Globalization has affected different countries in various ways, depending on the country’s degree of development as well as the extent to which countries are open to the flows of the global economy. A country like China has benefitted a lot from globalization. China was one of developing countries in the globe, but it is currently ranked in the top 10 strongest economies in the globe. China has been able to realize a massive economic growth due to its ability to access international market for its products (Lerner & Schoar 2010). Before globalization China economy was growing at a very low rate.
China has per capita GDP of $750 per annum, and this has made China one of the countries with the highest economic growth. Globalization has played a key role in this economic growth since it has enabled China to access potential markets in the globe (Mauro & Dees 2008). Moreover, globalization has enabled China to expand its operations in different parts of the world.
In African countries, globalization has led to the creation of employment opportunities (Bachetta & Ernst 2009). People in the host countries are being employed by a multinational company, and this improves their standards of living. Additionally, multinational companies generate revenue for governments in African countries, which is used to support various development projects in their countries.
However, multinational companies also have adverse effects on African countries. The major limitation of such companies is the fact that they contribute to the failure of domestic companies. This is because domestic companies cannot compete effectively with international companies, which are well established. Multinational companies have been the main cause of failure of many companies in African countries. In case domestic companies fail, a large number of employees are left jobless, and this results in many social problems in the host country.
In the United States of America, globalization has played a very critical role since it enables the country to increase trade in services, agricultural and food products and manufacturing. Additionally, globalization enables the USA to gain access to cheaper and more plentiful consumer goods. Also, globalization has played a crucial role in the creation of jobs to the country’s citizens. For instance, globalization has enabled the United States of America to expand its operations in different countries across the globe. This has resulted to the creation of more job opportunities to its citizens since some of them are sent as expatriates to work in different host countries.
However, globalization also leads to loss of U.S. jobs. This is because globalization has made multinational companies from the United States of America to open branches in many parts of the world, and to some extent, this results in loss of U.S jobs. This is because multinational companies employ a large number of workers from the host country than from the home country. This leads to loss of jobs that would be given to U.S. people if such companies were located in the home country.
Globalization results in competition and greater trade between economies of different countries. This leads to greater efficiency, lower prices and higher economic growth. Additionally globalization plays a significant role in ensuring increased investment levels in different countries. Globalization plays a significant role in growth of economy of developing countries. This is because multinational companies act as a source of income to the developing countries through taxation earned by governments of the host country. Taxes paid by multinational companies enable federal governments in the developing countries to support various development projects that stimulate economic growth and improve the standards of living of communities in the host country.
Another benefit of globalization is that it provides access to global markets and foreign capital. Through globalization, different countries are able to export their products in the global market. This enables countries to earn income which is crucial in stimulating economic growth and improving the standards of living for its citizens. This is because globalization opens markets and provides countries with an ample opportunity to identify suitable markets for their products. Additionally, globalization enables domestic corporations to expand their operations in different locations across the world, and this plays a highly critical role in enabling a country to gain foreign income.
Moreover, globalization offers access to advanced technology. Through globalization, many countries have been able to access advanced technology applied by companies in other parts of the globe so as to gain competitive advantage. For instance, companies in the home country can adopt new technologies used by foreign companies in order to gain a competitive edge in the market. Use of advanced technology is imperative because companies that use obsolete technology can easily be outdone in the market and sometimes leads to business failure. Therefore, globalization creates a good platform through which many companies adopt new technology in their operations and eventually this results to production of high quality goods and services.
Problems of Globalization
Despite the fact that globalization has many advantages, it also has some drawbacks, the most common disadvantage of globalization is the fact that developing nations strives to compete with developed countries. This results to negative effects in the developing countries because multinational corporations from developed countries are well established than multinational companies in the developing countries. Therefore, many companies from developing countries may not be in a position to effectively compete with foreign companies. This is because such companies are more financially stable and enjoy strong capital and customer base in the world market. Therefore, domestic corporations can fail due to their inability to compete with foreign companies. This can have adverse effects on the economy of developing countries since failure of a domestic company’s means that many people will lose their jobs and this can increase problems in the society.
Another problem of globalization is the fact that it leads to overexploitation of non-renewable resources. This leads to increase in pollution which eventually contributes to global warming. Additionally, globalization causes constant movement of skilled people especially in developing countries. This makes it difficult for some countries to retain their skilled workers since foreign companies attract them by offering attractive remuneration.