CIMA BA1 Syllabus A. Macroeconomic And Institutional Context Of Business - Globalisation - Notes ^{1 / 5}

is the integration of national cultures, economies and political systems.

Features of globalisation include:

• The ability of individuals to enter into transactions with individuals and organisations who are in other countries

• The increased importance of global economic policy to domestic policy

• The increase of globally linked and dependent financial markets

• The reduction in importance of local manufacturing.

• Reduced transaction costs

• The rise of emerging, newly industrialised nations

Factors encouraging the globalisation of world trade

• Country/continent alliances

• Legal factors such as patents and trade marks

• Markets trading in international commodities

• Lower international freight costs for businesses

• Lower barriers to the international movement of factors of production

• Reductions in the tariff levels imposed by governments

International trade

The political environment is very important in international trade. 

It is governed by an extra layer of legislation which includes treaties and agreements.