DR.

Radwa Lotfy Saturday, February 18, 2023

Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review

Introduction:

Globalization isn't a new concept. People have exchanged products with their neighbors since the
dawn of civilization. However, after World War II As a result of fast developments in
communication and transportation, the rate of globalization has accelerated in recent years.
Businesses can now find investment possibilities due to modern communication technologies.
Simultaneously, advances in information technology allow instant communication as well as the
movement of financial assets across national borders. Globalization is also aided by improved
fiscal policies inside countries and international trade agreements between them. Globalization is
aided by political and economic stability. Experts point to the relative instability of many African
countries as one of the reasons why Africa has not profited as much from globalization as Asia
and Latin America. Therefore, deeper research is required to have more details and information
regarding the benefits and drawbacks impact of globalization on economics.

Das, DK.(2004) argued that with increased cross-border financial flows among
industrial nations and between industrial and emerging economies, the present wave of financial
globalization began in earnest in the mid-1980s. Many of these countries liberalized capital
controls in anticipation of the benefits that cross-border flows would offer in terms of better
global capital allocation and increased international risk-sharing opportunities. The strong
assumption was that these gains would be substantial, particularly for developing nations with
less capital and more increased income growth. However, throughout the late 1980s and 1990s,
the increase in financial flows was accompanied by a series of currency and financial crises.
There is a widespread belief that developing countries that opened up to financial flows were
more vulnerable to crises than industrial economies and suffered far more severe consequences.
These developments have spurred a heated discussion over the disadvantages and advantages of
financial globalization among academics and practitioners (Das, DK.,2004).

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Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review
Positive impact of Globalization on Economics:

Bailey (2018) mentioned that Costa, L. (2008) claimed that, Globalization, it has been
argued, is not a new phenomena, but rather has its origins in the colonial growth era of the
seventeenth and eighteenth centuries. Its present application, however, may be traced back to
Levi's article 'e Globalization of Markets,' which was published in 1983. The simplest
explanation of globalization, among several that have been presented, is the relatively free
movement of services, goods, people, and ideas around the world. Cross-border world
commerce, as a percentage of global GDP, was 15% in 1990 but is forecast to rise to 30% by
2020, indicating the positive impact of the process. Market liberalization, low-cost
communication via the internet and phones, and the expansion of the so-called BRIC (Brazil,
Russia, India, and China) economies have been among the driver’s pushing globalization over
the last two decades (Costa, L. 2008), (Bailey, 2018).

International Monetary Fund (IMF) website stated on (2003), that the putative benefits
of financial globalization, aside from boosting GDP, is that it enables developing countries to
better manage macroeconomic volatility, particularly by lowering consumption volatility relative
to output volatility. Instead, the evidence implies that nations in the early phases of financial
integration were exposed to large risks in terms of increased output and consumption volatility.

National Geographic website (2003) stated that globalization gives firms a competitive
advantage by allowing them to acquire low-cost raw materials from throughout the world.
Organizations can also take advantage of cheaper labor costs in poorer countries while using the
technical skills and experience of more developed economies thanks to globalization. Different
pieces of a product may be manufactured in different parts of the world as a result of
globalization. The automotive industry, for example, has long embraced globalization to
manufacture distinct elements of a car in different nations. Even seemingly simple things like
cotton T-shirts may include businesses from multiple different nations. Services are affected by
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DR. Radwa Lotfy Saturday, February 18, 2023
Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review
globalization as well, several call centers and information technology services have been
outsourced to India by firms in the United States. Automobile manufacturers in the United States
have shifted their operations to Mexico, where labor costs are lower, as part of the North
American Free Trade Agreement (NAFTA). As a consequence, more employment are created in
nations where they are required, which can benefit the national economy and lead to a greater
quality of life. China is an excellent example of a country that has reaped significant benefits
from globalization. Another case in point is Vietnam, where globalization has resulted in a rise in
rice prices, allowing many impoverished rice farmers to escape poverty. As the standard of living
rose, more children from low-income households went to school instead of working. Consumers
gain as well. Globalization reduces production costs in general. This allows businesses to sell
items to customers at a lesser cost. The average cost of items is an important factor that leads to
rising living standards. Consumers may also choose from a greater range of products. This may
contribute to better health by allowing for a more diversified and healthier diet in certain
circumstances, but it is also blamed for increases in bad food intake and diabetes in others.

Negative impact of Globalization on Economics:

Urata, S, Hahn, CH, & Narjoko, D (2012) stated that even though international commerce
or globalization has benefited the globe as a whole, it is widely acknowledged that the benefits
have not been spread equally, not just among nations but also among people inside a country.
After WWII, the developed countries began to reverse protectionism, which expanded to
emerging countries in the 1970s. In the 1980s and 1990s, trade reforms were expanded and
consolidated across the developing world, including South Asia, East Asia, Latin America,
Eastern Europe, and, to a lesser extent, Africa and the Middle East. However, the outcomes of
trade liberalisation have been mixed, and they have occasionally fallen short of expectations
(World Bank 2005), (Urata, S, Hahn, CH, & Narjoko, D, 2012).

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DR. Radwa Lotfy Saturday, February 18, 2023
Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review
National Geographic website (2003) argued that globalization is not without its
drawbacks. Any change has winners and losers, and those who live in towns where employment
are outsourced overseas frequently suffer the most. This effectively implies that employees in
developed countries must compete for employment with workers in lower-cost markets; unions
and workers may be unable to fight against firms that give the choice of lower pay or losing
positions to a supplier in a lower-cost labour market. In the emerging world, where economies
are changing rapidly, the issue is more complicated. People's working conditions at some stages
in the supply chain are indeed appalling. Bangladesh's garment sector, for example, employs an
estimated four million people, yet the typical worker makes less in a month than a worker in the
United States earns in a day. A textile manufacturing building collapsed in 2013, killing over
1,100 people. Critics also argue that increasing work possibilities for children in underdeveloped
nations might exacerbate the negative effects of child labour and divert youngsters from
education. In general, opponents blame globalization's forces for fostering an atmosphere that
abuses employees in nations that do not provide enough protections. Globalization may also lead
to wealth gap and inequality between the more educated and less educated people of a
community, according to studies. As a result, unskilled employees may be impacted by falling
wages, which are under continual pressure as a result of globalization.

Bailey (2018) mentioned that Brokaw, P. (2014) pointed out that multinational
corporations have clearly benefited from the loosening of import tariff systems that traditionally
safeguarded local businesses, allowing them to operate more freely in recently liberalized
countries such as India. These businesses have developed two unique strategies for dealing with
globalization's issues. Some companies, like as Gillette, have maintained to produce their
products in a few huge plants with stringent quality control to assure consistent quality around
the world, while others, such as Coca-Cola, tailor their products to local tastes and make them on
the spot. They argue that recognizing regional characteristics is necessary for competing against
national competitors. In either event, these massive corporations can often reduce their tax
burdens by locating their headquarters in low-tax countries (Bailey, 2018).

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 DR. Radwa Lotfy Saturday, February 18, 2023
Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review

Conclusion:

As a summary after above mentioned details, it is clear that the impact of globalization on
economics is having both advantages and disadvantages, accordingly it is necessary to exert
more efforts and dig deep in related topics to study the market of each region separately before
deciding if the financial globalization is beneficial.

More researches and investigations shall be carried out for different regions to study the benefits and
drawbacks of impact of globalization on economics before going through applying financial globalization
for this market.

References:

1- Das, DK 2004, Financial Globalization and the Emerging Market Economy, Taylor & Francis
Group, Abingdon, Oxon. Available from: ProQuest Ebook Central.
2- Bailey, S., 2018. Academic writing: A Handbook for International Students. 5th ed. New
York: Routledge.
3- Urata, S, Hahn, CH, & Narjoko, D (eds) 2012, Economic Consequences of Globalization :
Evidence from East Asia, Taylor & Francis Group, London. Available from: ProQuest Ebook
Central.
4- International Monetary Fund (IMF) (2003) ‘Effects of Financial Globalization on Developing
Countries’ Available from:
https://www.imf.org/external/pubs/nft/op/220/index.htm#:~:text=To%20summarize%2C
%20one%20of%20the,volatility%20relative%20to%20output%20volatility. [Accessed 30
April 2022]
National Geographic website (2003) ‘Effects of Economic Globalization’ Available from:
https://www.nationalgeographic.org/article/effects-economic-globalization/9th-grade/#:~:text=Studies

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abdelhamid.halawa23bg@eslsca.edu.eg
Mob.: +201005858149
DR. Radwa Lotfy Saturday, February 18, 2023
Academic Writing 2 Abdelhamid Taha Halawa
ESL 72 V1 abdelhamid.halawa23bg@eslsca.edu.eg

Literature Review
%20also%20suggest%20that%20globalization,under%20constant%20pressure%20from
%20globalization. [Accessed 30 April 2022]

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