Question

Discuss the advantages and disadvantages of globalization in regards to its effects on emerging economies

Answer 1

Globalization means interaction of one economy with all other economies of the world called globalization Interaction can be in terms of financial transactions, trade, politics,education, production etc.  

Advantage of Globalization

1)First-Mover Advantages

A main driver of companies doing business in emerging economic is the opportunity for first-mover advantages. If a company can set up shop in an emerging economy and build early success, it can become the recognized brand in its industry called appealing opportunity. A successful first mover can build local partnerships and has an advantage over competitors that come along later.c

2)Access to Capital

Access to new capital is what drives many businesses to take on the risks of doing business in emerging markets. As new economies emerge, untapped capital is up for grabs and building and maintaining a pipeline to those funds helps companies not only expand abroad, also bring in new resources for domestic growth. Emerging economy capital can breathe new life into companies that have maxed out potential for new capital domestically.

3)Foreign trade

Globalization has created and expanded foreign trade in the world. Things only found in developed countries now can be found in other countries across the world. People can now get whatever they want and from any country. Through this developed countries can export their goods to other countries. Countries do business through international trade, whereby they import and export goods across the global.

4)Global market

Most successful emerging markets in developed countries are a result of privatization of state owned industries. In order for these industries increase consumer demand many of them are attempting to expand and extend their value chain to international level. The globalization impact on business management is seen by sudden increase of number of transactions across the borders.

DISADVANTAGES OF GLOBALIZATION IN EFFECT OF EMERGING ECONOMIC

1)cultural Risks

Main disadvantage of emerging economies is challenge in overcoming cultural risks. Cultural rituals and product usage vary around the world and when new economies emerge, they may have different expectations than ones in which a business is established.

for instance Aus business may struggle with understanding how to do business in China and Brazil, among the faster-developing markets in the early 21st century. These challenges increase for smaller companies with fewer employees and resources.

2)Limited Protection

Other disadvantage of emerging economic Is limited protection. Emerging countries often have less evolved legal and ethical protections, forcing businesses to risk encounters with criminals or crooked law enforcement agents. Stealing or scrupulous business transactions are common, but violence and even murder can happen in some countries.