Impact of Globalisation on Automotive Sector
#What are the positive impacts of globalization free
Also FDIs causes collapse of domestic industries due to unhealthy competition resulting from low cost of production as a result of from duty free imports (Chudnovsky and López, 1999). With the recent trends, the developed countries are not interested in compensating host countries for such environmental hazards caused by FDI flow. Through FDI flow, the developed countries have been able to transfer environmental hazards and industrial pollution from their home country to the host country. However, the impact of FDI is not always positive among the counties as such FDI brings hypothetical development rather than real life scenario (Martens and Raza, 2010). The impact of globalization, as a result of injection of foreign direct investment, on low-income countries has some benefits, for instance, there has been vivid economic growth in host counties as experienced in Mauritius and Madagascar.
Most export processing centers are characterized by extremely poor working conditions, low wages, and poor disposal of wastes, among others (Chudnovsky and López, 1999). Governments of these countries concentrate on the benefits which accrue from FDIs, ignoring the social cost implications such as pollution. In order to attract FDIs, a low-income country has to set up a special export processing zones or free trade zones. FDI is usually a commonly used driving force by the less developed countries to attract globalisation for the reason that FDIs bring infrastructural and technological advancement, creation of massive employment, new business ideas, and culturally advanced into the host country. In order to obtain a chance of capturing the potential benefits of globalization, low-income countries need to attract a vigorous flow of foreign direct investment. Globalisation and Foreign Direct Investments The impact of globalization has been felt all over the world (Martens and Raza, 2010). Finally, globalization has made people more aware of issues such as democracy, human rights, and gender due to greater access to sources of information.
There have been quick diffusion of ideas, goods, and information, capital, and people across the globe. Also, globalization has increased the velocity of worldwide interactions and transactions. To start with, social, political, and economic activities have obtained a much larger extensity, that is, decisions, events, and activities in one part of the world have signed on people in other parts of the world. Globalization has brought about significant changes in the global world. Advancement of technology (internet and infrastructure) has greatly improved the intensity, velocity, extensity, and impact of globalization (Audretsch and Thurik, 2000). Further, there has been a free flow of low-cost human capital across borders due to the opening of borders. Countries have been able to exchange good management practices. Another facet of globalization is the international flow in soft technology – knowledge of management practices and methods of work organization.
Globalisation is a multifaceted as it covers both economic as well as social aspect (Audretsch and Thurik, 2000) 1. The interconnectedness has been driven by increasing liberalization of international trade in goods and services, capital flow through foreign direct investment (FDI) and short-term flows, growth of multinational enterprises, reorganization of production networks on an international scale, and adoption of new technology including information technology. Globalization simply refers to the rapid growing interconnectedness between countries. The driving forces have broken down many physical barriers to worldwide communication, which used to limit connectivity between businesses over long distances. Two major driving forces for this are advances in telecommunications infrastructure and the rise of the internet. In the past two decades, technology has significantly become sophisticated, making it easier and economical for people to carry out business across the world. Introduction Globalisation and its Driving Forces