• Subject Name : Business environment

International Business Environment

Globalization can be described as a worldwide integration of economic and financial system. Through globalization, countries worldwide become inter-connected and interdependent and as a result the inter-connectivity between various economies helps reduce the overall barriers to trade and investment (Brandon, 2013). Globalization has resulted in reducing the trade barriers and boosting the investment activities. Now, the countries are not considered indifferent but, they tend to acquire the same level. The gap between these countries is reducing continuously. It is one of the major reasons of reducing inequalities among nations of the world. Decreasing the trade hindrances and investment enables in reducing inequality between various countries because of the following reasons-

  • Decreasing the trade issues and problems and investment empower the trading between developed and developing countries. Because of which they are tied in good relationships.
  • Movement of labour from developing countries to developed countries make the developed countries dependable on developing countries.
  • The multinational companies find good human resources in developing countries and open their offices in these countries. In this way, they start contributing to the economy of developing countries (E International Relations, 2020).
  • Reducing trade barriers and advanced technology has affected improvement in transportation between the two countries. It is breaking the inequality between the two types of countries. This had lead to structural and infrastructural development and growth of both economies.
  • Globalization also fosters the helping culture among the countries. One nation helps others when in need. This makes the countries stand on the same level.
  • The untapped opportunities can be exploited due to globalization and thus there will be a greater flow of investments and expertise in such nations. This will, in turn, boost the GDP of the economy and overall development hence reducing inequality. In addition to this, reduction in barriers to international trade and foreign direct investment can greatly boost productivity and also the level of output as well as out in the sense that it will be easy to conduct business internationally (Jhinghan, 2016).
  • Specialization will also be possible where nation countries which have skilled labours can focus on medicines while unskilled labours in can focus on agriculture.
  • It will also generate employment for the people as with the export and import sector opening up people will get new opportunities to flourish. With the creation of new employment opportunities and people getting unemployed consequently, the purchasing power will simultaneously increase. This will thereby increase the demand for goods and services. As a result of this, the producers will get an incentive to increase the level of supply as well. Now, as a result of the standard of living and quality of life will automatically increase for the individuals. This will, as a result, bring an increase in the economic growth and reduce the level of inequality among the various nations (Samimi and Jenatabadi, 2014).

Thus, globalisation plays a huge importance in reducing the rate of inequality among various countries of the world by fraternizing and collaboration. It helps the countries to come together on a global level and exchange goods by which they can prosper and develop.

References for Inequality Between Developed and Developing Nations

Brandon, L. (2013). The role of globalization in economic development. SSRN Journal 6: 137-142.

E International Relations. (2020). The impact of globalisation on poverty and inequality in the global south. Retrieved from https://www.e-ir.info/2020/03/22/the-impact-of-globalisation-on-poverty-and-inequality-in-the-global-south/

Samimi, P. & Jenatabadi, S. (2014). Globalization and economic growth: Empirical Evidence on the role of complementarities. PLoS ONE 9(4): e87824 https://doi.org/10.1371/journal.pone.0087824

Jhinghan, M.L. (2016). Microeconomic theory. India: Vrinda Publications.

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