Advances in communication and transportation technology, combined with free market ideology, it is indisputable that goods, services, and

capital have gained unprecedented mobility. These factors have helped the world connect and integrate, making it fast becoming near borderless. This is globalization. Streamlining to the economic sense, globalization can be referred to as increasing economic interdependence of national economies across the world through rapid increase in cross-border movement of goods, service, technology and capital. There is an emergence of a global marketplace or a single world market during the process of increasing economic integration. In the last 20 to 30 years, economic globalization mostly occurred between developed countries and developing countries. Growing integrated world economies have stepped up foreign direct investments reduced of trade barriers and modernized participating developing countries. At the present time, globalization is no longer a jargon exclusive for economists; it is a phenomenon that has swept across the World. Activities of trade and investment have thus expanded widely given the golden opportunities spun by it, having technology that lowers telecommunication costs spearheading the way. Countries, now, could easily trade and invest beyond the borders of their home ground as well as open up businesses in different parts of the World and yet, could still operate them as one. The effects of globalization in expansion of trade and investment are indeed well felt in todays world economy. And these effects have been the propelling force that stimulates firms especially from developing countries (eg. Malaysia, Indonesia, China and others) to increasingly invest abroad. Through globalization, land, labor, capital and entrepreneurs are the four main factors of production in which these effects are manifested. In land, which refers to not only location of firms but also raw materials for productions, expansion of trade and investment due to globalization has caused the availability of choice of strategic locations for firms to start off a new business or to expand its business coupled with access to much more raw materials needed for production and growth. Having able to find new markets in new locations abroad has definitely brought about higher possibilities of gaining soaring profits compared to only operating in domestic markets. Furthermore, firms that once could not produce products due to the absence of needed raw materials or facing problems of depleting resources can find their solutions in buying raw materials from abroad. An instance in which the factor of strategic location became reason for investment abroad is when China imposed government regulation on its telecommunication and 3G spectrum that caused Huawei Technology (a renown company in China) to divert its

investment in these particular areas to Malaysia. Adding to that, many firms in developing countries have opened up businesses in China due to its large domestic market as well as untapped markets. In another example involving China, it has been reported that Wuhan Steel intends to buy iron ore mines in Australia and Cambodia, having in mind that steel would be in demand to build up the Country in the future. Malaysias Petronas too had been actively investing in other countries such as Indonesia, Vietnam and Africa; countries which are related to the crude oil commodity. And of the most recent, Petronas Malaysia which bided and won the contract to develop Iraqs giant Majnoon oilfield provides another good example of developing countries investing abroad. Labor, skilled and unskilled, is one of the significant factors in production. And expansion of trade and investment due to globalization, it has enabled doors to be opened to firms for myriads of white and blue collar workers in different countries to be available at lower costs. When firms can lower its costs of productions by hiring cheaper labor (skilled or unskilled) and simultaneously increase production, firms are, without question, encouraged to invest aboard where labor costs can be reduced. China for one, offers such advantage in hiring labor. With its largest population in the World, skillful cheaper labor is obtainable. Many firms around the World have been progressively opening factories in China due to the labor factor. Close to home, Malaysias domestic labor, especially the fresh graduates, prefer not to work with their hands. As such, firms are facing the problem of lack of local labor the blue collar ones. Thus, there is the great incentive to invest abroad, particularly in China, where the problem can be solved without incurring extra costs and whats more, lower costs. And lower costs ties in with higher revenues and profits. Capital that refers to not only funds for firms, but also its equipment as well as technologies and ideas that are owned, plays the vital role in firms. Without funds, firms would exist. Without equipment, productions would be hampered. Without technologies and ideas, productions would not be efficient and would incur high costs. Expansion of trade and investments due to globalization has eased the flow of funds, goods and services as well as technologies and ideas. The idea of profiting much from investments abroad with easy flow of funds or profits back to developing countries to boost growth has inspired firms to venture out of their countries. Similarly, equipments of highest efficiency and highest yield that can be easily obtained abroad had a share in causing investments of developing countries to countries abroad. As technology has been the factor that caused expansion of trade and investment abroad, it is then appropriate to have a paragraph of its own.

As technologies become more and more advance in the present time, with the emphasis that telecommunication costs has been cut by almost all, people around the world can easily contact with each other with at a very low cost or free-of-charge by using internet software such as Skype and email. These facilities have connected people around the world, breaking down barriers after barriers. These encouraged firms to trade and invest abroad as it would almost cost nothing to get connected to the firms halfway across the World. Travelling to have meetings and discussions for contracts in other countries would not be necessary anymore. People are able to discuss details of contract via phone or internet. Teleconferencing that gathers all members of a meeting can be done without any hassle. Advances in technologies have therefore lowered the cost of transportation and communication. A vast amount of time are saved and as time is money, costs are further minimized. Expertise from differing areas in production can too be assembled to produce the best products at the lowest costs as production can now be divided in different parts of the World, and yet can still function as one with the existence of the internet. This optimal production conditions have attracted many developing countries to invest abroad where the grass is greener. Furthermore, products that are produce in different countries that can be sold at higher price (arbitrage pricing) in countries not involved in production would increase profits. And in turn again, globalization increased profit which is the main aim of firms would pull investments of firms in developing countries abroad. Entrepreneurs are firms owner and are the main beneficiaries when their firms do well. And one of the ways to expand the firms business is by collaboration with other firms or working hand in hand with other entrepreneurs. It can be done through globalization and it has indefinitely increased these collaboration opportunities. Ideas can be shared in which there are instances that the standing on shoulders effect could take place. One good idea leads to another better idea and eventually to the best idea. These ideas can be the money-making ground for the entrepreneurs. Moreover, work of collaboration between entrepreneurs in different nations brings positive effects such as being able to tap on entrepreneurs with local expertise when wanting to penetrate a particular countrys market. Firms have the advantage of spending lesser time to gather information about local markets and government regulations. A short span of time is only needed to enter new markets in countries abroad and heavy costs are avoided. All these stimulate firms to invest abroad. Enhancement through globalization has increased the expansion of trade and investment in World Economy and it stimulates firms especially from developing countries in investing abroad, investment of developing countries has significantly increased since the

expansion of trade and investment due to globalization. Result of globalization has been proven by facts and figures. Investments were first measured in millions of dollars which then increased to billions of dollars. In the 1980s, investments in developing countries were only US$ 6 billion. In 2008, this amount has jumped to a whopping US$ 425 billion. Looking into specific developing countries, China, which has been a member of WTO since 11 December 2001, experienced the upgrading of a significant number of firms to the status of international company. In the year of 2004, the percentage of international investment in China was 15.4%. It grew rapidly and reached 19.2% in the year of 2005 and 24.6% in the year of 2006. It shot up about 10% in 2007 which reached 34.4 % and grown slightly in the year of 2008 which is 35.1%. Through this, it is clear that there is an increase in the international investment of China in recent year. Rounding up, expansion of trade and investment due to globalization in the World Economy has indeed stimulated firms especially from developing countries to invest abroad which was brought about by the effects of those expansions. On the whole, firms investments behavior of going abroad was motivated by increasing profits and lowering costs through the expansion of trade and investment. The extent of the expansion has been great as investments increased from millions to billions. In short, world are benefiting through globalization.