Globalization and International Trade

Boskov, Tatjana (2020) Globalization and International Trade. In: Globalization, Trade Liberalization and Business Dynamism. Lap Lambert Academic Publishing, Germany, pp. 3-10. ISBN 978-620-281-437-9

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Globalization as a term refers to the growth of interdependence between
countries, resulting in increased integration of trade, finance, people and ideas in a
common global market. International trade and cross-border investment inflows are
main elements of this integration. As a process, globalization began after World War
II and has accelerated significantly since the mid-1980s. It is considered to be
governed by two main factors.
The first one, includes technological advantages that have reduced transportation,
communication, and deployment costs. These advantages are usually economically
feasible for companies that locate different stages of production in multiple
countries. The other factor relates to the increasing liberalization of trade and the
capital market. Namely, a growing number of governments are refusing to protect
their economies from foreign competition or from the effects of import tariffs and
non-tariff barriers such as import quotas, export restrictions and legal bans.
Numerous international institutions established during World War II,
including the World Bank, International Monetary Fund, and GATT, succeeded in
1995 through the WTO (World Trade Organization), all playing an important role in
promoting protectionism to be replaced by free trade. Empirical evidence suggests
that globalization has significantly boosted economic development in economies of
East Asian such as Hong Kong (China), the Republic of Korea, and Singapore. But
not all developing countries equally participate in globalization or are in a position to
benefit from it. In fact, except for most countries in East Asia and some in Latin
America, developing countries are rather passive in their integration into the world
economy. For example, Sub-Saharan Africa's share of world trade has declined
steadily since the 1960s, as the share of major oil exporters plummeted as oil prices
fell in the early 1980s.
Overall, countries that actively participate in the process of globalization, the benefits
come with new risks and challenges.

Item Type: Book Section
Subjects: Social Sciences > Economics and business
Divisions: Faculty of Tourism and Business Logistics
Depositing User: Tatjana Boskov
Date Deposited: 08 Feb 2021 09:12
Last Modified: 08 Feb 2021 09:12

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