David Rubin In This Article Positive Effects of Globalization

Effects of Globalization
How It Impacts Society and the Economy
By 
Justin Kuepper
Updated on September 18, 2022
Reviewed by 
Marguerita Cheng
Fact checked by 
David Rubin


In This Article

• 
  Positive Effects of Globalization
  
• 
  Negative Effects of Globalization
  
• 
  Protectionism Through Tariffs
  
• 
  Future Outlook
  
• 
  Frequently Asked Questions (FAQs)
  

Globalization refers to the increasingly integrated nature of economies around the world. This integration has both positive and negative effects.

The hope is that increased global trade will lead to more competition, which will spread wealth more equally. Those who are in favor also claim that trade across borders will help limit military conflicts. However, there are downsides to boosting trade between countries. Some critics point to globalization as a factor in rising nationalism and income inequality, among other issues.
Learn more about the pros and cons of globalization to understand how it affects economies and individuals.

Key Takeaways

• 
  The benefits of globalization for countries include foreign direct investment and technological innovation.
  
• 
  For companies, globalization allows for more efficient operations through economies of scale.
  
• 
  The downsides of globalization include potential issues with interdependence and loss of sovereignty.
  

Positive Effects of Globalization

The Milken Institute's "Globalization of the World Economy" report of 2003 noted many of the pros and cons of globalization. Although nearly two decades have passed since the report came out, the ideas behind it remain relevant.¹
Some of the pros of increased global trade include: