The Link between Globalization and Economic Crisis

The Link between Globalization and Economic Crisis
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Abstract
The current economic crisis has been felt by many countries across the world. There has not been a worse economic crisis since the great depression. Largely, this was triggered by an explosion of financial products mainly in the U.S. and spread fast in other parts of the world. This raises the question as to the importance of the globalization process and the interdependence of states. This research paper postulates that the process of globalization has played a major role in the spread of economic crisis the latter, which has also affected globalization by making states to focus more on national interests as compared with international affairs.
The Link between Globalization and Economic Crisis
Introduction
Since the year 2007, the world has been locked in economic crisis with major economies going through a deep recession. Globalization has been instrumental in the said economic crisis. Understandably, the globalization process has interconnected repercussions and affects political, economic, social and technological facets of the world (Leiser, Benita & Bourgeois-Gironde, 2016). On one extreme, globalization is one of the major causes of the spread of the economic crisis with the epicenter been the US economy. The crisis spread to the rest of the world due to states’ interdependence. On the other extreme, the global economic crisis has raised concerns regarding the level of globalization and its importance. During the first years of the crisis, most states were concerned with their national interests and had little to think about international interests (Danner, Danner & Bavaresco, 2017). This raises the question as to whether the economic crisis has weakened the process globalization. Globalization process and the ensuing economic crisis have been topics of great interest among researchers today. While they are often analyzed independently, the two phenomena are closely related, which begs the questions as to their linkage. This paper seeks to argue that globalization plays a major role in orchestrating global economic crisis.
The international financial and trade market suffered during the recession and the situation was worsened in the recent 2007-2008 global financial crisis that followed. Consumer spending has remained sluggish and this has limited the capacity of food and beverage companies, including hotels and restaurants, to increase their prices. Challenges continue to persist despite the fact that measured growth is experienced in a number of markets (Marginean & Orastean, 2011). Managers are forced to jungle between enhancing customer satisfaction by employing an appropriate number of highly qualified personnel, while at the same time cutting on operational costs to ensure that the establishment remains profitable. High commodity prices have had a huge impact on the ability of food and beverage operations to remain profitable.Globalization has changed the way people do business as technology advances and increased movement of people bring consumers from diverse geographical backgrounds into contact with products and services from other parts of the world. This enhances e...