The Economic Advantages and Disadvantages of the Economics Globalisation for Developed and Developing Countries.
The Economic Advantages and Disadvantages Of The Economics Globalisation For Developed and Developing Countries.
According to Goyal (2006), the globalisation of economics is an integration of economic factors between countries around the world through cross-border movement of capitals, labours, goods and services from one country to another country. Consequently, it gives an impact for involved countries, which are not only a benefit but also a detriment. While it may be true that the globalisation of economics gives more advantages for both developed countries and developing countries, I do believe that either the globalisation of economics has potential deficiencies for developed or developing countries based on the following reasons. Firstly, Goyal (2006) points out the ultimate advantages of the globalisation of economics are not only for the developed countries but also for the developing countries. With reference to India, the benefits of the globalisation of economics for the developing countries are the increasing of Gross Domestic Product (GDP), the expanding of foreign direct investment, and the rising of the foreign trade number in which reflected in the amount of import and export per year (Goyal 2006). Furthermore, Sledge (2007) outlines that the globalisation of economics not only gives benefit to macroeconomic sector, it also has advantage for microeconomic sector in which indicate in the financial firm performance either the firm located in developing countries or developed countries. In addition, Sledge (2007) concludes that the greater foreign sales of a firm, the better financial firm performance. Moreover, Sledge (2007) also mentions that the higher foreign assets as a percentage of total assets, the higher profit of a firm and the greater foreign employees as a percentage of total employees, the better a firm productivity. However, according Stallings (2001) the increasing of foreign direct investment also creates potential risks. The
According to Goyal (2006), the globalisation of economics is an integration of economic factors between countries around the world through cross-border movement of capitals, labours, goods and services from one country to another country. Consequently, it gives an impact for involved countries, which are not only a benefit but also a detriment. While it may be true that the globalisation of economics gives more advantages for both developed countries and developing countries, I do believe that either the globalisation of economics has potential deficiencies for developed or developing countries based on the following reasons. Firstly, Goyal (2006) points out the ultimate advantages of the globalisation of economics are not only for the developed countries but also for the developing countries. With reference to India, the benefits of the globalisation of economics for the developing countries are the increasing of Gross Domestic Product (GDP), the expanding of foreign direct investment, and the rising of the foreign trade number in which reflected in the amount of import and export per year (Goyal 2006). Furthermore, Sledge (2007) outlines that the globalisation of economics not only gives benefit to macroeconomic sector, it also has advantage for microeconomic sector in which indicate in the financial firm performance either the firm located in developing countries or developed countries. In addition, Sledge (2007) concludes that the greater foreign sales of a firm, the better financial firm performance. Moreover, Sledge (2007) also mentions that the higher foreign assets as a percentage of total assets, the higher profit of a firm and the greater foreign employees as a percentage of total employees, the better a firm productivity. However, according Stallings (2001) the increasing of foreign direct investment also creates potential risks. The
References: : Goyal, K. A. (2006). ‘Impact of Globalization on Developing Countries (With Special Reference To India)’. International Research Journal of Finance and Economics, Issue 5 (2006), 166-171. Kimakova, A. (2009). ‘Government size and openness revisited: the case of financial globalization’. KYKLOS, Vol. 62 – August 2009 – No. 3, 394–406. Sledge, D. S. (2007). ‘Globalization and Performance in The New Millenium :A Look At Firms From Developed and Developing Nations’. Journal of American Academy of Business, Volume 10 Number 2, 51-57. Stallings, B. (2001). ‘Globalization and Liberalization: The Impact on Developing Countries,”. United Nations Press, 1-39. Wilson, B. A. (2006). ‘India and the Global Economy’. Business Economics, Volume 41 Number 1 / January, 2006(Number 1 / January, 2006), 28-36.