Globalisation and International Trade

Globalisation has transformed the business landscape. Firms that once competed only in domestic markets now face international competition and have access to global opportunities. This lesson examines the causes and characteristics of globalisation, the role of emerging economies, and the reasons why businesses choose to trade internationally.

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What Is Globalisation?

Globalisation is the increasing integration and interdependence of the world's economies, cultures, and populations. For businesses, it means that markets, supply chains, competition, and opportunities are increasingly international rather than national.

Key Features of Globalisation

Feature	Explanation
Free movement of goods and services	Reduced trade barriers (tariffs, quotas) allow goods to flow more freely across borders
Free movement of capital	Investment flows internationally — firms can raise capital and invest in foreign markets
Free movement of labour	Workers can move between countries (subject to immigration policies), creating international labour markets
Transfer of technology and knowledge	Ideas, innovations, and best practices spread rapidly across borders
Convergence of consumer tastes	Global brands and media create increasingly similar consumer preferences worldwide

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Reasons for Globalisation