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What are the advantages and disadvantages of globalization?
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Globalization improves productivity

Globalization improves domestic productivity by expanding knowledge. Allowing foreign imports increases competition, which forces innovation in order for companies to stay in demand.
Economics Globalisation Politcs

Context

Globalization enhances the spread of knowledge across international borders. This foreign knowledge has allowed economies to adopt foreign industry best practices and increase productivity.

The Argument

The increased transfer of foreign expertise and knowledge led to an increase in domestic productivity. The International Monetary Front (IMF) estimates that globalization has been directly responsible for an increase of 0.7% annually in emerging market economies. [1] In addition to exposure to foreign knowledge and expertise, the introduction of foreign competition in domestic markets has also served to improve productivity. As firms with more advanced technology and productivity enter a market, domestic firms are forced to develop strategies to match their productivity. This is a clear advantage as productivity growth is the strongest driver of long-term economic growth. [2]

Counter arguments

With increasing global competition, domestic productivity only increases for those who already have access to significant capital. Small local businesses are unable to compete and are driven out of the market.

Proponents

Premises

[P1] Globalization facilitates the spread of knowledge across international borders. [P2] Heightened knowledge leads to heightened productivity. [P3] Therefore, globalization leads to increased levels of productivity.

Rejecting the premises

References

  1. https://www.weforum.org/agenda/2018/04/globalization-helps-spread-knowledge-and-technology-across-borders/
  2. https://www.brookings.edu/opinions/financial-globalization-and-productivity-growth/
This page was last edited on Friday, 30 Oct 2020 at 15:30 UTC

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