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Chapter 3 The impact of globalisation on

international economic competitiveness

3.1 Globalisation

According to the definition, globalisation describes how ‘national and regional economies, societies and
cultures have been integrated through a global network of trade, communication, immigration and
transport’. According to some sources, the definition of globalisation was already known in the Bronze Age.
Others pin the date more reasonably in the period of global exploration kicked off by Christopher
Columbus’ discovery of America in 1592 – this marked the birth of the first global trade networks,
pioneered by European powers. 1

Nowadays, globalisation is based on the mobility of capital and goods. The sharp drop in transaction costs
is due to technological progress. Companies can gain a competitive advantage by introducing
internationalisation strategies. Generally speaking, the entry of a company into foreign markets gives
a great opportunity to increase the competitiveness of our company.

3.2 Positive impact of globalisation on international economic competitiveness

Positive impact of globalisation on international economic competitiveness:

• Free trade - reduces barriers such as duties, taxes, subsidies and other barriers between countries,
promotes global economic growth, creates jobs, makes businesses more competitive and reduces prices
for consumers.

• Falling prices - Competition between countries can lead to lower prices for products and services.

1 https://www.getsmarter.com/blog/market-trends/the-historical-impact-of-globalisation-on-economies-and-business/