When we are talking about a phenomenon like globalization,
we can generally say that there are "push" and "pull" factors. Push factors, in the
context of globalization, are negative factors that cause globalization to occur. They
are things that push firms away from wanting to do business in just one country. This
is in contrast to pull factors that attract firms to countries other than their
own.
The main push factors in globalization are factors
that create an unstable or unpromising business environment in the firm's home country.
A firm in the United States, for example, may feel that labor costs in that country are
too high and may be "pushed" to globalize. A firm in Greece might feel that the
country's debt problems make its economy too fragile and may seek to globalize as a way
to hedge against a collapse of the Greek economy.
In ways
like these, the business environment in a country may push firms in that country to
globalize. Factors that make a country's business environment bad will cause firms to
look to expand to places with better environments.
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