International Business: Globalization

Globalization

Developing nations developing world

In the beginning of the last decade of 20th century , the world economy devised a new method to expand . The process of globalization has been added with a very new term i .e , the foreign direct investment . The third world nations sensed this FDI as the new tool of globalization and development and in less than twenty years it has now become synonymous with the word growth with every developing nation is vying for FDIs and many companies from the west have been invited by a number

of nations to invest . News reports suggest that economic giants from third world Asia namely China and India are expected to grow at the rate of 9 .7 and 6 .5 percent respectively . Though the difference between the two is quite high but both the nations are one of the fastest growing economies in the world . The GDP growth rate of these nations is much higher than that of any developed nation . It 's not just the growth rate but also the sheer size of the economies of these nations that has made them an indispensable part of the world economy . China has now become the factory of the world with large multinational companies infusing lots of money in establishing manufacturing units and India is now one of the major destinations for back office jobs and is the leading service sector economy . Its not just these two nations have shown higher growth but many other developing nations which includes almost the whole of South East Asia and a few parts of Latin America . The globalization has started giving results . The process which has got its roots right from the beginning of 20th century with the beginning of economic cooperation between Europe and the United States has now become synonymous with the word development no only in western world but also in Far East Asian Countries (The World Bank Group , 2000

The purpose of this is to analyze the effects on both developed nation as well as developing nations as both the categories are said to the most benefited one when this globalization has spread all around the world in form of foreign direct investment (FDI . The gives brief explanation of globalization and its different phases and theoretical aspects of some of its components . While presenting theoretical arguments , the main focus of the is an exploration of different aspects of FDI while keeping in view of its impact on the growth of economy in terms of growth in GDP . The looks in detail towards the contribution of FDI in the growth of developing nations and also the role played by multinational firms in the fire-sale purchases for expanding their base in the developing nation . It has examined World Bank Development Indicators Website and this statistical investigation has been made to look into the above mentioned impact of FDI on GDP (The World Bank Group , 2000

The outcome of the has concentrated around the concept...