How Globalization Affects Developed Countries

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How Globalization Affects Developed Countries
Industrialized or developed nations are specific countries with a high level of economic development
and meet certain socioeconomic criteria based on economic theory, such as gross domestic product (GDP), industrialization and human development index (HDI) as defined by the International Monetary Fund (IMF), the United Nations (UN) and the World Trade Organization (WTO).
Trade among nations via the use of comparative advantage promotes growth, which is attributed to a strong correlation between the openness to trade flows
and the affect on economic growth and economic performance.
Globalization of product and financial markets refers to an increased economic integration in specialization
and economies of scale, which will result in greater trade in financial services through both capital flows and cross-border entry activity.
Empirical research examining the effects of several components of globalization on growth, using time series and cross sectional data on trade, FDI and portfolio investment, found
that a country tends to have a lower degree of globalization if it generates higher revenues from trade taxes.
Foreign Direct Investment’s impact on economic growth has had a positive growth effect in wealthy countries
and an increase in trade and FDI, resulting in higher growth rates.
These effects have been analyzed over the years by several studies attempting to measure the impact of globalization on various nations’ economies using variables such as trade, capital flows
and their openness, GDP per capita, foreign direct investment (FDI) and more.
These studies examined the effects of several components of globalization on growth
using time series cross sectional data on trade, FDI and portfolio investment.

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