It comes with a cost-benefit package (Faux, 2007).
The export and the import of the nation get affected due to globalization. So, the policies previously formulated e.g. in United States hampered export. It affected the currency value of the country, the value of goods and services with job losses. The trade practice gets affected if globalization is not in the favor of the domestic country. Some restrictions are required so as to prevent the middle and the small class of the businesses to bear the heat of globalization (Imade, 2003).
The products and the services sold in the global market generate foreign currency. The products and services that are availed in the domestic country of the globalized world helps in the flow of currency from own economy to the other economy. So, the balance of payment gets affected. The balance of payment shows a negative balance which implies the country is facing problem in terms of international trade. The balance of payment should be always positive or equal vent in nature so as to minimize the risk of currency value in the world economy.
Globalization also gives an opportunity of Foreign Direct Investments (FDI), which means inflow of foreign currencies for investment purposes through companies within the domestic country which also increases the economic strength of the nation. But also as it is foreign money, the return related to it would also be transferred to the foreign investor. Ultimately, the big corporate gets the advantage of foreign currency and grows further (Heakal, 2010).
Both the transacting parties can gain absolute advantage from globalization. Specialization in terms of technology or labour gives opportunity to produce goods or services at a low cost and gets them exported. The imported goods or services come at a low cost in comparison to its manufacturing cost in the country. By this way, it is expected that the values of goods and services comes at a cheap rate. But if the policy is formulated is in