Economic globalization

What is economic globalization?

Economic globalization consists of economic and trade integration between countries at the national, regional and international level, with the purpose of efficiently take advantage of the goods and services of each country.

This union of national and regional economies is carried out through the transaction of goods, services, technology and information. between the respective countries.

Said globalization is driven by the growth of the media, whose technologies have been promoted in recent times, for example, with the progress of the internet.

Characteristics of economic globalization

Between the main features of economic globalization we can mention that:

• This driven mainly by various free trade agreements or economic blocks, such as Mercosur or NAFTA.
• Promote job creation and encourages the economy of the countries involved.
• It is carried out under the import and export of goods and services.
• Use telecommunications and technology to perform transaction processes.
• It is present in most of the countries of the world.

Advantages and disadvantages of economic globalization

Advantage

The main advantages that economic globalization brings are the following:

• The costs of industrial production decrease and therefore generate that the prices of commercial products are cheaper.
• Increase the amount of employment in those countries that join with others to import and export, especially if these are underdeveloped countries.
• Competition occurs between companies, which generates a increase in the quantity of products to be marketed and progress in their quality.
• Improvements in technology allow a better production faster and that they constantly discover new ways to optimize technology within processes.
• The consumer or buyer has at their disposal a greater variety of products to choose from, including necessities and goods.

Disadvantages

Like any economic action, globalization has several disadvantages, such as:

• Economic inequality both between different countries and between the various companies that compete in a region.
• Environmental degradation.
• Tendency to higher unemployment in developed countries, as their companies migrate to other places where they can find cheaper raw materials or labor.
• Less development in the national market, which reduces the opportunities of national companies and can cause inconveniences in the country's economy.

Examples of economic globalization

Examples in which this model of economic globalization is applied are proposed below.

• The use of social networks for digital marketing, which allows the commercialization of goods and services in different regions around the world.
• The stock market, as its prices influence companies throughout the world.
• The free trade agreements between different countries.
• The rapid expansion of transnational companies with different subsidiaries in various parts of the world.
• Exploitation of the natural resources of a country to be sold as raw material.
• International money transaction services, such as PayPal.
• New types of currencies that are traded in globalized markets, such as the BitCoin.