Analyze Impact Of Globalization On World Economy

Analyze the impact of globalization on the world economy.

Answers:

Globalization through Multi-national Corporations (MNCs) has had a profound impact on the world economy with intense interlinking of production across the globe.

1. MNCs usually set up production units across the globe in places where the market is nearby, there is the availability of skilled and unskilled labour at low costs and other factors essential to the growth of production.

2. The setting up of production in various countries leads to the development of products globally. Sometimes, the MNCs might also set up production with the local companies of a country as a joint responsibility, thus bringing in latest technology and foreign investment.

3. The MNCs also link and control the production of goods. Large MNCs in developed countries often place orders for production with small producers all around the world which are then sold by the MNCs under their brand name. The power of control and influence of such corporations has contributed to the interlinking of such widely dispersed locations across the globe. This process, in turn, has contributed to the growth of globalization process.