Globalization Questionnaire
Globalization can be seen more prominently now than in recent years and has put pressure on major businesses who once dominated their respected industry. Now those once mighty titans must look out for the smaller competitors who are looking to produce products and services cheaper, more up to date, and faster. Boundaries have been lowered and the business battle field is becoming more level with each passing year with the evolution of technology.
According to (Hill, 2009), globalization can be defined as the reference of the shift toward a more integrated and interdependent world economy. The term globalization can be divided into the globalization of markets and the globalization of products. Adam Smith proposed a theory in 1776 known as Adam Smith’s theory of absolute advantage. This theory sheds light on the unrestricted free trade and how it is beneficial to any given country (Hill, 2009). Smith’s theory states that imports and exports should be influenced by the invisible hand rather than by policy established by the government. This theory was a break through because it was the first of its kind at the time. An earlier theory that supports globalization includes mercantilism which states that a country should maintain its best interest with regard to trade by limiting the trades that they import and maximize its exports, this would allow the country to accrue more gold and silver, increasing its wealth, rather than “sending” its wealth to another country (Hill, 2009). These theories would not have been proposed were it not for 3 main factors driving globalization.
Declining trade and investment barriers are the first one, where the barriers of free trading across borders are becoming less intrusive. An example of this is would be the Uruguay Round of negotiations where trade berries were further reduced in December of 1993