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What Is the Connection Between Economic Growth and Globalization?

China's economy has grown dramatically since the country opened itself up to the global marketplace.
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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 07 August 2014
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The link between economic growth and globalization is derived from the benefits associated with the increased rate of globalization in relation to its effect on various economies. Countries may benefit from globalization in many ways, including expansion in the international market for locally produced goods, benefits derived from the human capital in people from other countries, and ability of the various countries to benefit from the raw materials from other countries. In other words, the link between economic growth and globalization flows from the ease of communication and transportation that fosters an interdependency and other forms of economically beneficial and social relationship between countries.

Perhaps the most apparent relationship between economic growth and globalization is the role of globalization as a facilitator of international trade. With the advent of globalization trade between various countries is no longer hindered by distance, customs and language. Most people do not even have to leave their own county in order to conduct business with parties in other countries, because globalization has made it possible for economic transactions to be conducted over long distances. One of the ways in which the link between economic growth and globalization can be measured is by assessing the impact of international trade on some economies. Such economies are dependent to a large extent on exporting local resources or locally produced goods to other countries.

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Another parameter for the measurement of the connection between economic growth and globalization is related to the benefit derived from the mobility of human capital, which cannot be separated from the individual. For example, an experienced engineer will carry his or her wealth of knowledge to any country or territory he or she may live. Consequently, one of the links between economic growth and globalization is the fact that it has made it possible for different countries to benefit from human capital in a manner that was not possible before the advent of globalization.

A country with an abundance of crude oil can only capitalize on the value of the oil on the international market to make economic progress due to globalization. Such a product will not benefit the country economically to the full extent that is possible without the opportunities afforded by globalization. Indeed, the structure that has been established in the international market serves as a vehicle for the economic growth of various economies. This relationship between economic growth and globalization is most evident in the area of tourism. The industry is a direct offshoot of globalization, which has made it possible for cheaper transportation and intercommunication between both near and distant nations.

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