Globalisation has lead to a very fast growth in world trade. Imports and exports have risen sharply over the last few years due to the deregulation of trade between countries. Economies in transition, such as China, India, Poland and Chile have experienced 5% export growth per annum by diversifying into manufacturers, which is largely due to the deregulation on their exports to other countries.
With globalisation foreign investment has increased because it has become increasingly easier to recognize, purchase and control a foreign investment. Portfolio investment has also increased because of the ease of purchasing stock through the world stock markets which are all linked by technologies.
Information technology has reduced the cost of conducting international business. This has caused economies of scale to occur which reduces the cost of production and output increases. The internet has caused an increase in productivity of both labour and capital in production. …
