This paper analyzes the types of globalization and the effects of globalization; globalization is the process of integration and interaction among people, governments, and companies of different nations. This process is mainly driven by international trade and investment through information technology. This process has effects on cultures, the environment, economic development, political systems, and the well-being of societies around the world. Globalization dates back to thousands of years when people bought and sold goods from each other in lands of great distances. Therefore, the current ways of globalization are similar to those of the past.
types of globalization and effects of globalization
THE MAIN TYPES OF GLOBALIZATION
There are three main types of globalization practiced in the world. Political globalization refers to political cooperation between different countries. Global organizations like the United Nations (UN), the world trade organization (WTN) increase the degree of political globalization hence prevent conflicts. This is one of the positive effects of globalization. Social organization refers to the sharing of ideas and information among people of different countries. Thus, this type is known for the erosion of cultural differences. Economic globalization refers to the interconnectedness of economies through trade and exchange of resources. This is through international trade and investment. Lastly, this brings about a two-way structure of technologies and resources.
THE EFFECTS OF GLOBALIZATION ON ECONOMIC GROWTH
The effects of globalization on economic growth are as follows. It encourages foreign direct investment (FDI) which tends to increase at a much faster rate than the growth in the world trade. This investment helps boost technology transfer, growth of global companies, and industrial restricting hence encourages international trade and investment. Increased competition from globalization stimulates technological innovations which help improve the economic output of countries. Globalization encourages economics of sale that reduces costs and prices, therefore, supports economic growth. It sometimes negatively affects small businesses attempting to compete domestically. Lastly, the effects of globalization greatly depend on the types of globalization.
effects of globalization on economic growth
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