What are the push factors that drive economic globalization?

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pohnpei397 eNotes educator| Certified Educator

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.