The effects of global economic integration
MSC INTERNATIONAL BUSINESS
INTERNATIONAL TRADE ESSAY
|With reference to some of the results of empirical research, examine the effects of global economic integration on countries |
|and the world, taking care to stress both the positive and negative impact on global integration. |
Words Count: 1519
Student: Mariam Diaby
Tutor: Brian Ardy
International trade has always existed between countries around the world. But between 1870 and 1913 and since 1945 economic links between countries become more evident, contributing to see the world as globalised. This economic integration can be defined as the process whereby the markets of different countries for different goods, services and factors of production are increasingly becoming parts of a global market. Saskia Sassen (2006) writes that « a good part of globalization consists of an enormous variety of micro-processes that begin to denationalize what had been constructed as national — whether policies, capital, political subjectivities, urban spaces, temporal frames, or any other of a variety of dynamics and domains ».
Recently, global economic integration has intensified; world trade and capital flows have risen substantially, and production of goods and services is increasingly controlled by multinational corporations. As global economic integration is becoming deeper, questions arise related to its actual benefits, but also its negative effects.
The positive effects of global economic integration are the main reason for its development. The main positive effect of economic globalization is the improvement of efficiency in the economy. By trading with other nations, countries’ market sizes become larger and, consequently have more production and higher production efficiency due to economies of scale. Countries can specialize on the basis of comparative advantage and this will raise the efficiency in production.