![]() ![]() This has increased the ability for firms to receive finance. In the past few decades, there has been a general reduction in capital barriers, making it easier for capital to flow between different economies. When US banks suffered losses due to the sub-prime mortgage crisis, it affected all major banks in other countries who had bought financial derivatives from US banks and mortgage companies. Financial system increasingly global in nature.recession in one country affects global trade and invariably causes an economic downturn in major trading partners.) This means countries are increasingly interconnected. This is an essential feature of new trade theory. Firms exploiting gains from economies of scale to gain increased specialisation.Often this has occurred through the support of the WTO. Reduced tariff barriers which encourage global trade.Growth of global trading blockswhich have reduced national barriers.Growth of multinational companies with a global presence in many different economies.It means that I can often find people to do a job relatively cheaply because labour costs are relatively lower in the Indian sub-continent. There, people from any country can bid for the right to provide a service. For example, to work on improvements on this website, I will go to a global online community, like. Improved technology which makes it easier to communicate and share information around the world.This reduced the costs of inter-modal transport, making trade cheaper and more efficient. From 1970, there was a rapid adoption of the steel transport container. For example, there has been a rapid growth in air travel, enabling greater movement of people and goods across the globe. ![]() Improved transport, making global travel easier.Main reasons that have caused globalisation However, in recent decades the process of globalisation has accelerated this is due to a variety of factors, but important ones include improved trade, increased labour and capital mobility and improved technology. The world economy has become increasingly interdependent for a long time. Readers Question: Evaluate the significance of the factors which have contributed to globalisation. ![]()
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