Globalisation Advantage and Disadvantages - Economic Transition In India
Benefits
The important arguments in favour of globalisation are:
- Productivity grows more quickly when countries produce goods and services in which they have comparative advantage.
- Living standards can go up faster.
- Global competition and imports keep a lid on prices, so inflation is less likely to derail economic growth.
- An open economy spurs innovation with fresh ideas from abroad.
- Export jobs often pay more than other jobs.
- Unfettered capital flows give access to foreign investment and keep interest rates low.
Disadvantages
Following are the cases against globalisation:
- Millions have lost jobs due to imports or production shifts abroad. Most find new jobs that pay less.
- Millions of others fear loosing their jobs, especially at those companies operating under competitive pressure.
- Workers face pay cut demands from employers, which often threaten to export jobs.
- Services and white-collar jobs are increasingly vulnerable to operations moving offshore.
- Employees can lose their comparative advantage when
companies build advanced factories in low-wage countries, making them as
productive as those at home.
Tags : Business Environment and Law-Business And Its Environment
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