By definition, ‘globalisation’ is the process by which regional societies, economies and cultures have become integrated by communication, transportation and trade. In comparison, ‘International Trade’ is the exchange of goods, capital and services across international borders or territories. The main difference between the two is the scale on which trading takes place. Trading within globalisation only takes place on a regional or national scale while international trade, as the name suggests, takes trading to an international scale. Another major difference between globalisation and international trade is the types of trade that can take place.
Globalisation affects the world in a number of ways. The industrial effects of globalisation saw the emergence of worldwide production markets and the movement of materials and goods between and within national boundaries brought a broader access to a range of foreign products for consumers and companies. The financial effects include the emergence of worldwide financial markets and better access to external financing for borrowers. Due to globalisation by the 21st century over $1.5 trillion in national currencies were traded daily. In an economic sense, globalisation has introduced the realization of a global common market that is based on the freedom of exchange of goods and capital.
International Trade differs from globalisation as the factors of production, such as capital and labour, are typically less mobile across countries. International trade is restricted to trade in goods and services and cannot trade in capital, labour or other production factors to the same extent. However goods and services can serve as a substitute for production trades. Rather than importing a factor of production, a country can choose to import goods that make intensive use of that factor of production. For example, rather than the United States importing Chinese labour, an alternative can be made by important goods from China that were produced with Chinese labour.
Globalisation affects the world in a number of ways. The industrial effects of globalisation saw the emergence of worldwide production markets and the movement of materials and goods between and within national boundaries brought a broader access to a range of foreign products for consumers and companies. The financial effects include the emergence of worldwide financial markets and better access to external financing for borrowers. Due to globalisation by the 21st century over $1.5 trillion in national currencies were traded daily. In an economic sense, globalisation has introduced the realization of a global common market that is based on the freedom of exchange of goods and capital.
International Trade differs from globalisation as the factors of production, such as capital and labour, are typically less mobile across countries. International trade is restricted to trade in goods and services and cannot trade in capital, labour or other production factors to the same extent. However goods and services can serve as a substitute for production trades. Rather than importing a factor of production, a country can choose to import goods that make intensive use of that factor of production. For example, rather than the United States importing Chinese labour, an alternative can be made by important goods from China that were produced with Chinese labour.
