Globalization: Drivers, Effects and Blocks

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1. What is globalization, and what are some of the traditional international trade theories that support the concept of globalization?

This question is straightforward. It is asking for a definition of globalization and some traditional theories that support the concept of globalization.

Globalization is generally understood as a process in which trade barriers (physical, political, economic, cultural) separating different regions of the world are reduced or removed, thereby stimulating exchanges in knowledge and goods. Said another way: "Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization has several different facets including the globalization of markets and the globalization of production," (Source: Hill, Charles W. L. Global Business Today, 3rd ed. Mcgraw-Hill/Irwin: New York, 2004).

Some of the traditional trade theories that support the concept of globalization are the theories of Free Trade, Life-Cycle, Mercantilism, Heckscher-Ohlin, New Trade and Porter's Theory. These theories suggest which factors are important and therefore are often used to support the concept of globalization (Source: Hill, Charles W. L. Global Business Today, 3rd ed. Mcgraw-Hill/Irwin: New York, 2004).

For more on the Heckscher-Ohlin Model please click http://72.14.253.104/search?q=cache:95WmMbQiZCwJ:homepages.strath.ac.uk/~hbs00107/public_html3/docs/31329%2520TRADE04L%2520rev%2520-%25202006.doc+Heckscher0Ohlin&hl=en&ct=clnk&cd=3&gl=ca&client=firefox-a.

2. List the major drivers of globalization and give three examples of each.

The forces that are driving global change are a complex mix of economic and political factors magnified by a high rate of population growth. These interact in ways that are not always predictable (Source: http://www.grida.no/geo2000/english/0027.htm).

Economic factors and the rise in worldwide consumption drive globalization. For example, United States, Japan and the European Union producing more than 40 per cent of global carbon dioxide emissions (CDIAC 1998). Also, there have been exceptional rates of economic growth in many developing countries (e.g., populous economies of east and south Asia) over the past 25 years. In fact, the highest consumption growth rates are now found in the developing world and, because of the large populations in these regions, their total consumption is catching up with the industrialized world. For example, total carbon emissions from China now exceed those of the European Union, although China's per capita emissions are much lower (Source: http://www.grida.no/geo2000/english/0027.htm).

The rise in population drives globalization. For example, many natural resources (such as water, soil, forests and fish stocks) are already being exploited to or beyond their limits, so ...