s practically, globalization reflects the free flow of information, trade, goods, and capital as well as people across increasingly meaningless national borders. On a macroeconomic level market convergence is achieved via the removal of physical, fiscal, technical barriers and the liberalisation of internal competition.
Key features of globalization include:
1. The removal of physical barriers include those that restrict the movement of goods and the movement of people leading to a decrease yielding in a decrease of transaction costs. Furthermore labour can go where it is most beneficial.
2. The removal of fiscal barriers includes the restriction on capital movement, leading to a more open access for investors to markets. These include tariffs as other trade distorting measures.
3. Technological convergence means trading blocks as the North American Free Trade Alliance (NAFTA) or the European Union (EU) implement a common technological standard to avoid duplication costs and sub-optimal manufacturing quality.
4. The removal of barriers across the world is designed to promote increased business, cost savings and greater efficiency. Physical technical and fiscal barriers have all served to protect markets from competition. The removal of those opens up markets to the realities of competition. The task environment of companies is now not only confined to it is local environment but more to the risks and chances of an interconnected global economy (Welford & Prescott, 1996).
Macroeconomic market convergence, on the other hand, is responsible for a globalisation-pull on the firms due to the demand of the global customer. Increasing customer mobility and the explosive development of information and communication technology all foster the emergence of a new demanding customer in homogeneous markets. The World-Wide Web is another trend having on impact on the globalisation of markets. As an information superhighway, the ...