Investing and Globalization Thesis

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Comparative advantage states that mutually beneficial exchange is possible whenever relative production costs differ prior to trade. Nations gain by producing goods at relatively low costs and exchanging their outputs for different goods produced by others at relatively low cost. Thus, all potential trading partners can gain enormously through appropriate specialization and exchange. A country has an absolute advantage in producing a good if production of the good absorbs fewer resources than are required in other countries or by other individuals or firms.

Globalization drivers over the last decade include market drivers (common customer needs, global customers, global market channels), cost drivers (global scale economies, sourcing efficiencies, factor of production differences), government drivers (unrestrictive trade and investment policies, compatible technical standards, common marketing regulations) and competitive drivers (high degree of cross-border trade, global competitors, and interdependence among countries in policy, trade/investment and management) (Industry globalization).


The global marketplace is here today, but challenges loom in the years ahead. Globalization will continue to fuel greater competition which, in turn, will place more emphasis on cost control. Financial managers will need to build and sustain improved governance levels and internal controls for new markets. As markets become more integrated and interdependent, there will likely be a greater focus on international risk assessment. Further, international financial reporting standards are likely to emerge and financial managers may be required to support these as well advise the business on ways to revise operational practices in ways that minimize impacts of the change from GAAP......

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"Investing And Globalization", 20 April 2009, Accessed.21 May. 2025,
https://www.aceyourpaper.com/essays/investing-globalization-stock-splits-22686