How does globalisation increase the cross border transactions between the countries?
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Explanation: Globalization has had its impacts on world cross-border flows e.g flow of capital. There has been an increase in international economic activity which has expanded world trade and general capital flow. Goods are flowing across national borders easily through reduced trade barriers and new transportation methods. Globalization encourages companies to internationalize and to substantially increase the volume and types of cross-border transactions in goods, services and capital. Also, the globalization leads to rapid dissemination and diffusion of products, technology and knowledge in the world, regardless of the origin. Globalization has led to increased flows of inward investment between countries, which has created benefits for recipient countries. These benefits include the sharing of knowledge and technology between countries. In the long term, increased trade is likely to lead to the creation of more employment in all countries that are involved.Economists suggest that nowadays, cross-border investments are not being made so much to build capital infrastructure as they are to seek countries with the lowest taxes. Some form of globalization may be inevitable over the long-run, but the historic bumps spurred by economic crises and other consequences suggest that change is the only reliable constant. Most economists agree that globalization provides a net benefit to individual economies around the world, by making markets more efficient, increasing competition, limiting military conflicts, and spreading wealth more equally around the world.
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