Impacts of Globalization 

In the United States,  a lot of the discussion about the impacts of globalization is on topics like outsourcing issues and unequal gains from trade on the financial level, but there are other impacts we should consider. As labor and foreign direct investment (FDI) moves around the world, the increase in jobs can lead to an increase in the living standards as suggested by the theory of the law of one price. The spread of technology can lead to new innovative development ideas—consider how cell phones have changed the fight against poverty in Kenya with M-Pesa. On the other side, however, is the argument that if the local infrastructure is not ready for the technology, it can overload the system. Rwanda experienced frequent brownouts when more hotels and development rapidly arrived with advanced technology that overloaded the non-advanced power grids. There can be other impacts on employment, culture, and population that you will dive into during the exploration assignment in this lesson. 

What Is a “Global Firm”?

One common term in international business courses is multinational or corporation (MNC). While this term has multiple varying definitions that include operating conditions and asset allocations, this class will assume a standard definition of a firm that operates out of multiple countries. Note that this definition uses the term operates because firms can conduct business in foreign countries in various sales and production formats. Global firms, on the other hand, typically produce and sell in multiple countries. Throughout this course, we will examine various sizes and configurations of firms engaging in international business; therefore, for the most part, the term we use to describe the firm is not as important as the firm’s operation and strategic interests.

For an introduction of the diversity of businesses that engage in global business, read this profile of U.S. businesses that engage in trade from the U.S. Census Bureau.