The effect of globalization in Europe
Globalisation is the integration of national economies into the international economy through trade, foreign direct investment, capital flows, migration, and the spread of technology. Goods and services that appear in a country will be immediately promoted and commercialised in the other countries. The globalization affects the business world and exerts awide influence on society. Globalization and its consequences on trade and international finance have powerful effects on national economies. They favor the progression of emerging countries to the detriment of others Third World countries forced to wait for emerging countries to outsource what they no longer intend to produce and increase internal economic inequalities everywhere.
To be morecompetitive a country must create links with others countries. The relationships created will bring both opportunities and disadvantages. In Europe, we have an economy imbalance between emerging countries such as Romania, Poland…. and the developed countries. Globalization helps emerging countries growing and expanding by opening barriers to competition, trade and investment. Moreover globalizationwill boost growth and will rise social welfare through a more efficient allocation of resources. In First Part we will see the changes that can make globalization in the business and in the second part in the globalization can altering the life of people.
First of all, In Europe we have 2 groups of countries, the countries of West and the countries of East. In reality we talk about the richcountries for the West and emerging countries for East. These countries don’t have the same economic wealth for instance the GDP in Luxembourg is 64000€ per residents unlike in Leetonia is 5600€ per residents. Website:http://www.journaldunet.com/management/repere/pib-habitant-europe.shtml. The difference is very huge but these countries belong to the European Union. The Current state in Europe is atthe moment an economy stuck in a system of mass production, large firms, existing technologies and long-term employment patterns. The impact of rapid technological change and strong global competition on economic growth will depend on various factors such us the flexibility of production structures and the labor market. We can imagine the globalization for emerging countries will be the onlywinner but globalization will help the economic opening of overseas investment. For example the firms “Renault” create a lot of factory in Eastern countries and develop a new brands “Logan”, the both will be winner; Renault have a new opportunities to develop his economy and host countries have relation economic, job offers... Thanks the opening of the borders we can see a new competition of firms as aresult the firms reduce the price, try to find the innovation... So the concurrences become international. Moreover we can see emergent countries can purpose more Agricultural product in general than Eastern countries. In fact in globalisation all countries must have an advantage comparative to be more competitive. Under the demonstration of David Ricardo (English Economist of 18th century) , thespecialization of countries according to their comparative advantages and their integration in world trade is beneficial to each of them. But international trade changes the distribution of income within each nation, so that part of the population benefits from trade liberalization while another suffers.
The globalisation open new economy before we had difficulties with tax, quotas, customs dutyand with new technologies and evolution like internet, new methods of logistics everything , same money; that open a new perspective to develop economy and new market. Moreover with the single currency “Euro”, this reduce economy barrier such as the capital mobility become more easily in addition we can see munch direct foreign investment. This is a situation of “Deregulation” we have a...
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