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Every Coin Has Two Sides: Advantages and Disadvantages of Globalisation

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Globalisation has become a hot-debated issue in the last ten to twenty years. Globalisation is affecting the world from different perspectives, such as political perspective, economic perspective, and cultural perspective. Currently, whether globalisation can bring more positive effects or negative effects to the modern world is still open to debate. Different scholars around the world hold distinctive views regarding the definition of globalisation, but in this essay, the following two definitions are used. Globalisation refers to the creation and intensification of global linkages(Gokh,2018). In addition, globalization also refers to “the compression of the world and the intensification of consciousness of the world as a whole” (Robertson,1992,p3). One of the main ideas of globalisation is to break the barriers between countries. Everyone can receive information about different events happening in the world instantly. In the era of globalisation, breaking of barriers between countries is inevitable. Trading, foreign investments, population movements, these activities across the globe help intensify the linkages between countries and compress the world, not only barriers of borders is broke but also the barriers of different time zones.

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Every coin has two sides when some are supporting globalisation, while some are advocating anti-globalisation, it is clear that globalisation has obvious advantages and disadvantages. In this essay, the advantages and disadvantages of globalisation on economic perspective and political perspective will be discussed.

From the economic perspective, with the increasing efficiency of transportation and convenience of information flow, economic activities around the world become more intensive, including trade, capital flow, transferring of production technology and even the use of common currencies. Countries are no longer independent and closed economies. Instead, countries cooperate with each other beyond national boundaries. These activities led to economic globalisation.

Speaking of advantages of economic globalisation, the first advantage is the higher production efficiency. Under globalisation, many countries concentrate on producing products or even processes in which they have comparative advantages. For example, countries with a larger population can focus on labour based production, while countries with advanced technology level can focus on high-tech products.

The second advantage of economic globalisation is the expansion of the sales market. As the barriers between nations are abolished, many companies sell their products in other nations or regions and earn higher revenue from different places. This increases local employment opportunities and raises the wage level of these industries.  Also, under economic globalization, the developed nations enjoy more external investment opportunities. The developing nations can also attract foreign investment with low production cost. This raises people’s income level and increases the demand for international commodities. Since the 1990s, the total trade volume in the world has increased at an average speed which is twice of the growth of the world economy(World Trade Organisation, 2015). It shows that the degree of globalisation of the market has become higher. When countries focus on producing products which they have comparative advantages, with the expansion of sales market countries can make the largest profit out of their products.

Moving to the third advantage of economic globalisation, diversification of products. Under globalization, many nations have actively abolished the trade restrictions, such as lowering tariffs and abolishing the quota system. Trading thus increases rapidly. This increases producers’ profits and provides more choices to the consumers due to the diversification of products. The same kind of product made in different countries can have different quality, this provides more choices to consumers. At the same time, prices of products are lowered by competition. Without globalisation, consumers can only buy domestic products of higher price due to the lack of competition. However, many nations have opened their markets under globalisation, welcoming products from different nations. It provides more choices to their citizens. Producers lower product prices and improves product quality to attract consumers. In light of these two advantages, economic globalisation not only benefits producers but also consumers.

The fifth advantage of economic globalisation is that it stimulates economic development in developing countries. Under economic globalisation, international capital can flow to the regions with potential for development. Industries in developed countries involving a higher production cost will move to the developing countries to save cost. So the developing countries will be provided capital, production technology and management experience they lack for economic development. They can then rapidly develop their economy and improve their people’s quality of life. This can provide more job opportunities hence decrease the unemployment rate and citizens’ skills can be improved.

The next advantage is the effects of wealth redistribution. Under the economic globalisation, capital rushes from the developed nations to the developing nations for investment to gain a huge amount of profit. If the developing countries can make use of the development opportunities by globalisation, they can also accumulate wealth and strengthen their national power. Take China and India which are developing countries as examples, globalisation leads to the shift of industries to China and India from the developed nations. China becomes the “world factory” which exports a huge amount of industrial goods such as garments and toys. India develops into a producing nation of electronic and technology products. In recent years, the gross domestic production of China and India has increased rapidly at a speed of around 7%(The Economic Times, 2018). This proved that globalisation can lead to the redistribution of wealth.

Aforementioned are the advantages of the economic globalisation. Then it is time to discuss the disadvantages of economic globalisation.

To commence with, the first disadvantage is the increase in foreign economic risks. With the deepening of economic globalisation, nations around the worls=d are closely related to each other in both financial investment and commodity trade. The internal economic issue of a nation is no longer the problem of a single nation, but a global issue under globalisation. The reliance of countries on each other due to globalization increases their foreign economic risks. The following are examples in recent years: Global Economic Crisis in 2008, it was a financial crisis merging from the US in 2007. After the outbreak of the Subprime Mortgage Crisis in the US, the investors lost confidence in the value of backed securities and caused liquidity crisis. Many large financial corporations closed down or taken over by the government, for example, the investment bank Lehman Brothers closed down, Washington Mutual Bank also declared bankrupt (Kingsley, 2012). The Economic crisis had spread to other countries quickly. The economic crisis in the US and Western countries had reduced their purchasing power for other countries’ product. The spread of economic crisis shows that, apart from the integration of trade, the economic globalisation also leads to the integration of economic crisis.

The second disadvantage of economic globalisation is that international speculation increases the economic risk of different countries. Under the trend of economic globalisation, both the flow of goods and international capital become more frequent. many capitalists from the more developed countries, therefore grasp the chance to find chances for speculation in other countries in the world, bringing huge economic risks to these countries.

Moving onto the third disadvantage of the economic globalisation, the control of a country over its economy is weakened. Under globalisation, the production of raw materials, production process, sales markets and even financial markets are all internationalized. The government of a single country cannot effectively change the economic conditions through internal policies. Countries have close economic cooperation under globalisation. Economic organisations or other countries may oppose the economic policy of a country such as an increase in tariff. Countries will then lose their economic autonomy. Global enterprises have a high mobility under globalisation. When formulating policies, government of different countries often tend to give in to these big enterprises so as to prevent them from leaving the country and harming the economy. With such influence, the control of a country over its economy is weakened.

The fourth disadvantage is that globalisation harms the environment. Under economic globalisation, both markets and production are also globalised. International trade rapidly increases. The production of industrial goods leads to more depletion of energy and more pollution. More developed countries relocate production to the less developed countries to save production cost. However, these less developed countries do not have adequate production technologies and protection measures to protect the environment. More pollution is thus resulted.

Aforementioned are the advantages and disadvantages of economic globalisation. Coming after is the advantages and disadvantages of political globalisation.

Under accelerating integration around the globe, the influence of a country’s’ policies is no longer confined within a single country, but different countries worldwide. At the same time, countries over the world carry out international cooperation so as to deal with international issues collectively. The policy decisions of the government get beyond national boundaries. This can be called as political globalisation.

The first advantage of political globalisation is global governance. Governments in countries around the world solve transnational problems collectively through international means such as global warming, transnational crimes, epidemics, terrorism.

The second advantage of political globalisation is the formation of international governmental organisations. Normally speaking, these organisations cover a wide range of categories like politics, diplomacy, economy, society, energy, environment. These organisations usually help to solve transnational problems.

After mentioning the advantage of political advantages, coming after is the disadvantages of political globalisation.

The first disadvantage is the diplomatic disputes among countries. After the Second World War in 1945, countries in the world are largely under peaceful conditions. But still, a few regional conflicts exist. Hostile conditions happened among part of the countries, due to armaments developments and scramble for resources. All these threaten regional safety. For example the development of nuclear weapons in Iran and North Korea in recent years. Also, the territorial disputes in recent years such as disputes over the sovereignty of the East Sea between China and Japan.

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The second disadvantage of political globalisation is the disputes on trade among countries. Following the increase in trading among countries in the world, it is difficult to avoid the occurrence of disputes during trading processes. For instance, conflicts occur in tariff, trading quotas, government subsidies, the openness of market, level of currency rate.



  • Gokh, I.(2018) Globalisation and Business, from CORP 1528 Global Business Issues, De Montfort University, Hugh Aston, Leicester, 8 October.
  • Kingsley, P. (2012). Financial crisis: timeline. [online] the Guardian. Available at: https://www.theguardian.com/business/2012/aug/07/credit-crunch-boom-bust-timeline [Accessed 4 Dec. 2018].
  • Kollewe, J. and McCurry, J. (2011). China overtakes Japan as world’s second-largest economy. [online] the Guardian. Available at: https://www.theguardian.com/business/2011/feb/14/china-second-largest-economy [Accessed 3 Dec. 2018].
  • Robertson, R. (1992). Globalization: Social Theory and Global Culture. SAGE Publications, 1992, p.8.
  • The Economic Times. (2018). China’s GDP grows 6.8%. [online] Available at: https://economictimes.indiatimes.com/news/international/business/chinas-gdp-grows-6-8/articleshow/65004017.cms [Accessed 3 Dec. 2018].
  • The Economic Times. (2018). India’s GDP growth rises to 7.2% in December quarter. [online] Available at: https://economictimes.indiatimes.com/news/economy/indicators/indias-gdp-growth-rises-to-7-2-in-december-quarter/articleshow/63111337.cms [Accessed 3 Dec. 2018].
  • World Trade Organisation (2015). International Trade Statistic 2015. [online] Available at: https://www.wto.org/english/res_e/statis_e/its2015_e/its15_highlights_e.pdf [Accessed 2 Dec. 2018].


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