Economic Growth
Globalization plays a major role in a countries economic growth in what an economy can produce if it is using all its scarce resources. An increase in an economy’s productive potential can be shown by an outward shift in the economy’s production possibility frontier (PPF). Globalization impact on economic growth results such factors that bring a larger economic benefit mostly to developing countries.
Increased Standard of Living
Economic globalization gives governments of developing nation’s access to foreign lending. When these funds are used on infrastructure including roads, health care, education, and social services, the standard of living in the country will increase. If the money is used only selectively, however, not all citizens will participate in the benefits.
Access to New Markets
Globalization leads to freer trade between countries. This is one of its largest benefits to developing nations. Homegrown industries see trade barriers fall and have access to a much wider international market. The growth this generates allows companies to develop new technologies and produce new products and services.
Widening Disparity in Incomes
While an influx of foreign companies and foreign capital creates a reduction in overall unemployment and poverty, it can also increase the wage gap between those who are educated and those who are not. Over the longer term, education levels will rise as the financial health of developing countries rise, but in the short term, some of the poor will become poorer. Not everyone will participate in an elevation of living standards.
Decreased Employment
The influx of foreign companies into developing countries increases employment in many sectors, especially for skilled workers. However, improvements in technology come with the new businesses and that technology spreads to domestic companies. Automation in the