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28 Positive Effects of Globalization (With Examples)

Last Modified: 25 March, 2020 1 Comment

Globalization means integrating the economy of a country with the world economy. Globalization is a process of change resulting from a combination of increasing cross-border activity and the spread of Information Technology, facilitating real-time communication worldwide.

positive effects of globalization
positive effects of globalization

With respect to developing countries, globalization policy has both positive and negative aspects.

Globalization leads to contraction or shortening of the world market.

Now, every country in the world is adopting the policy of globalization.

The globalization of the economy has also resulted in the globalization of trade and business.

Positive Effects of Globalization

The following are the positive effects of globalization on different categories:

1. Expansion of Market

Globalization helps in the expansion of the market for trade and business.

The business Institutions are free to expand their business worldwide.

National boundaries become meaningless for the multinational companies as they get unrestricted power to exploit resources of the whole world economy.

2. Large Size

Globalization results in the expansion of business Institutions because their business area is not restricted to a nation only.

Thus, produce in huge quantities.

Related: 13 Negative Effects of Globalization (You Should Know).

3. Free Determination of Production Capacity

Due to globalization business Institutions themselves cannot fix their production capacity.

It entirely depends on market power.

4. Indigenous Multinational Corporation

Globalization helps in the development of indigenous multinational companies/corporations along with multinational corporations.

Such kind of corporations is still establishing.

5. Development of Independent Money Market

Globalization has resulted in the development of an independent money market.

The exchange rate of money depends on market power on demand and supply power.

6. Technical Development

Globalization makes available technical knowledge worldwide.

This helps in the development of Technical research, discoveries and new techniques of Industrial Production.

7. Transfer of Business

Due to globalization, business Institutions acquire new field for business.

For example, during the Gulf War, Kuwait Bank had transferred its business to Bahrain and sent information through fax for continuing business.

Related: 22 Advantages and Disadvantages of Privatization (Economics).

8. Flow of Resources

Globalization Makes the process of flow of resources like labour, goods, capital, techniques information, etc. among different countries of the world.

9. Brand Development

A globalized economy favors the business of branded goods/items.

This is not only restricted to two durable goods are capital goods but also to normal drinks, cereals, clothes, etc. Or in other words, the market is full of brand equity.

Bonus: 11 Limitations or Disadvantages of Branding (Explained).

10. Development of Competitive Power

Globalization helps in increasing the competitive power of business institutions.

When the demand for products of a particular institution Rises, then the production is increased to fulfill demand and for this new resources and technologies are applied.

All this increased the competitive power of business.

11. Increasing Number of Plants

As a consequence of globalization, a business institution increases the number of products and plants.

Such plants are established at different places in accordance with the available conditions and resources.

12. Awareness of Business Environment

Globalization results in an increase in the number and complexity of components of the business environment.

The business institutions have to consider population, surroundings, cost of health care, diseases, drugs, weapon trade, minorities, etc.

13. Expanded Capital Market

Application of globalization policy, make available wider capital market to the business institution.

This helps in providing Loans at a low rate.

It will increase direct foreign investment (FDI) and Indigenous, companies will get a chance to issue share capital in the international capital market.

14. Efficiency Services

The facilities of Telecommunication, transport, bank, insurance has improved as a result of globalization only.

Related: 17 Major Problems of Public Sector in Economy (With Examples).

15. Better Industrial Relations

Globalization has resulted in an increase in industrial and labor mobility.

positive effects of globalization
positive effects of globalization

This provides a friendly environment in the relations between employer and employee.

16. Freedom of Business

Globalization has made the business institution free from foundations off-licenses, rules, and regulations, inspectors, bureaucracy, traffic, etc.

17. Development of Professional Management

Globalization has helped in the development of professional management in the country.

Related: 15 Major Role of Entrepreneur in Economic Development.

18. Promotion of Combinations

Due to globalization, many large and small trade Institutions of the country are combined together.

This will make sure the success of non-profitable Institutions by merging them with profitable Institutions. 28 Important Functions of Sales Promotion (With Examples).

19. Development of Infrastructure

Rapid development in infrastructure facilities like light and electricity, roads, railways, harbors, Airways, alternative Sources of Industrial power, telephone, etc.

All are the consequences of globalization policy.

20. Increase in Savings and Investment

Due to globalization, there will be an increase in employment opportunities and therefore earnings.

This will increase investment and saving habits and this further increases the rate of capital formation in the country.

21. Balance of Payment

Globalization maintains the equilibrium of Balance of payments.

It can be a possibility only to balance all types of imports and exports.

22. Huge Investment in Social Sector

The social aspects like education, Health, Family, Welfare, etc. have gained the possibilities of Huge investments.

Related: 26 Challenges in Way of Social Responsibilities of Entrepreneurs.

23. Increase in Employment Opportunities

Yet, direct employment opportunities have been reduced due to globalization, but there is an increase in indirect employment opportunities in the field of services.

There is an increase in employment opportunities in small and cottage industries.

It also increases the chances of self-employment.

24. Increase in Mutual Cooperation

Globalization policy has increased cooperation among employees, employers, investors, and government.

25. Remedies to Social Problems

Social problems like poverty unemployment, diseases, illiteracy, etc. can be eradicated by applying globalization policy.

26. Removal of National Boundaries

Globalization has resulted in the merging of national boundaries with the whole world economy.

27. International Cooperation

The combination of a country’s economy with the world’s economy gains International cooperation.

28. Raised Social Status

Globalization has increased the living standard of people.

It has made the life luxurious and of a high standard by providing facilities for standard goods, medicines, education, entertainment, etc.

Thus, now you know the positive effects of globalization on the economy.

Learn More

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  1. Gordan Remsey says

    January 14, 2020 at 2:02 PM

    vokin’ donkey

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