Marketing: Investment and Asian Emerging Countries Essay

Submitted By sitticwi1581
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Writing Essay
Since globalization commenced in developing countries in the 1980s, these countries have been reformed by governments about trade, education and foreign investment. Some opponents argue that globalization is the main reason of wider income gaps that result in an increasing number of poor people in developing countries. However, some proponents argue that an increasing level of gross domestic products (GDP) and trade results from economic globalization because of an increase in volume of foreign investments. Globalization has positive effects on economies in Asian emerging countries because of rising economic growth in these countries, broadening of based knowledge in nations and improving quality of life.

First of all, the main reasons of increasing economic growth in Asian developing countries are trade liberalization and increasingly industrial productivities. Government’s policies about less restriction of trade such as foreign direct investment (FDI) and free trade agreement (FTA) have incentive for foreign investors to invest their businesses in developing countries. According to empirical researches, Dollar (2005, P192) and Shin (2009, P151) demonstrate that economic growth of china has increased dramatically since government started the policies about trade reform such as reducing import tariff rate and opening economic areas for multinational corporations (MNCs) to be able to invest directly in 1978. Furthermore, industrial productivity growth is a method of growing economies in developing countries because it measures efficiency of productions and services in companies connecting with the level of gross domestic products in countries. These companies bring technology and management system such as Total Quality Management (TQM) to optimize the use of available resources. Therefore, they are able to boost product capacity in manufacturing. For example, over annual growth rates of labour productivity growth in South Korea have increased dramatically by exceeding 10 percent and growth rates of industrial productivity have been considerably higher in South Korea than these in some developed countries after globalization (Dollar & Sokoloff, 1990 cited in Bell & Pavitt , 1997, P112). Consequently, less restriction of trade and increasing productivity growth in industries has positive effects on economic growth. Moreover, range of Knowledge of nations in emerging countries has broadened rapidly on account of flow of technology and new form of trading communities. Firstly, technology transferred by developed countries has effects on industrial and agricultural systems. Two groups collaborating with transnational corporations (TNCs) are local employees and entrepreneurs who are educated knowledge of technology by these companies. Local workforces are trained about elementary technology and know-how because this knowledge is crucial factor for employees to effectively improve the local organizations (Blostrom, 2000; Reddy, 2006 cited in Krieckhaus & Mukherjee, 2011, P154). Another group is entrepreneurs taught by transnational companies about operational process and quality standard; therefore, dissemination and training courses are provided. According to study of Islam (1992) cited in Tambunan (2009, P149), transitional companies are responsible for training technology classes for contractors, subcontractors and skilled workers because they work at these companies. Secondly, these foreign companies’ knowledge is not educated only industries, but it is also brought to develop on agricultural system. According to article, World Bank (1998) cited in Krieckhaus and Mukherjee (2011, P154) examines that there is a double rise in the volume of staple crops in Asian developing countries since 1950. Lastly, online trading communities such as E-commerce are popular for enterprises in contemporary businesses because it is able to easily purchase order and make transaction via online websites. It contributes to…