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Globalization has a profound effect on all countries around the world. Third world countries and developed countries are all affected by globalization in many different ways. One of the more prominent ways that countries are affected is through their economy. This article will look at how globalization affects countries and their economic growth.


Foreign Investment

The phenomenon that is globalization has allowed countries to invest in other countries to advance technologies and boost the economy. Foreign investment increases competition between businesses. Large businesses now have the ability to compare prices and costs and create strategies to benefit their business by utilizing foreign countries. One country may have cheaper manual labor and easier access to resources to manufacture a particular product. This promotes further economic growth in the country producing the good and also the foreign entity establishing that business relationship. The rapid growth of foreign investment has led to small businesses struggling to keep up with enormous corporations.


New Markets

Globalization has led to new markets in developed countries. New access to products and services have created niche markets that otherwise would not exist. Smaller businesses can now trade more easily with other countries to supply them with products or services that other countries may not have. This economic growth leads to better technological advancements and increased productions overall.


New Technology

Much of the economic benefits of globalization comes from the technologies that are included. New technologies have made it much easier for countries to interact with one another in a political sense and more importantly a business sense. New distribution channels have been created to better get products out to countries who demand them. Telecommunication technologies have changed making it easier to communicate with other countries and define their needs and wants. Industrial structures have been revamped to accommodate new markets and customers better abroad.



There is no doubt that globalization has a wide effect on the economic growth of a country. There are some that believe that the expansion of companies into foreign nations could hinder the growth of native businesses. Corporations in developed countries who have the ability to reach into foreign countries can disrupt economic growth in the native country as well as their own. Small businesses suffer because of this effect of globalization. The economic growth due to globalization should be studied and monitored carefully, so it does not spiral into dependency and perhaps a monopoly.