Globalization refers to the integration of economic activities with local and foreign companies competing in the host country. It involves the liberalization of the markets so that trade can be conducted freely. It brings in technological advancement into a country and the customer benefits greatly since the transaction costs have been reduced.
Globalization has led to the increase of multinational corporations in the world market due to the liberalization of trade policies and practices. The spread of globalization is based on the capitalist theory of free trade. With globalization there are winners and losers. The bilateral and multilateral trade agreements contribute to globalization as countries in the same region open up to one another through trade agreements on import, export taxes and tariffs.