Globalization is a multidimensional process of global integration and interdependence. Globalization increases international trade, FDI, migration, knowledge and technological transfers and homogenizes cultures and tastes. Globalization basically transforms the world into a global village.

    The causes of globalization include:

    1) Trade Liberalization.

    After WW2, there was an increase in trade liberalization and consequent removal of trade barriers like tariffs and quotas which increased foreign trade. Most countries, especially former communist countries, opened up to foreign trade and integrated more closely.

    2) Better Transport/Communication.

    The development of technology and transport has made it quicker, cheaper and easier to exchange goods and services internationally. For example, better communication technology means orders can be placed at any time and big cargo ships means bulks of goods can be transported around the globe at a low cost.

    3) MNCs.

    Multinational companies (MNCs) like Coca Cola, McDonalds and Samsung have spread all over the globe to exploit economies of scale through larger markets.

    4) More Free Capital Mobility.

    Over the last few decades it has become easier to move money from one country to another, making it easier for MNCs to move their investments and profits around the globe and thus causing MNCs to spread to different countries. It has also become easier for people to migrate to different countries all over the globe.




    Please enter your comment!
    Please enter your name here