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Global Systems And Global Governance > 7.1 Globalisation. Dimensions Of Globalisation > Flashcards

7.1 Globalisation. Dimensions Of Globalisation Flashcards

1
Q

Define global economy

A

Increasing rates of interaction of prices, supply and demand at a global scale

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2
Q

Briefly explain the global economy concept as a ‘system’ of interconnected elements and scales

A

The local economy - the national economy - transnational corporations+technology+national states+ global shifts in the production of goods and services+ emergence of ‘new’ global financial systems

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3
Q

Define globalization

A

A process by which national economies, societies and cultures have become increasingly integrated through the global network of trade, communication, transportation and immigration

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4
Q

Define capital flows

A

The movement of money for the purpose of investment, trade or to produce goods/provide services. Usually regarded as investment into a production operation

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5
Q

Define international trade (inbound and outbound trade)

A

The exchange of capital, goods and services across international borders. Inbound trade is defined as imports and outbound trade as exports

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6
Q

What has a been globalization primarily focused on?

A

Economic relationships such as international trade, foreign direct investment and international capital flows

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7
Q

Outline 7 dimensions of globalization

A

Economic (trade and aid, TNCs, capital flows)
Political (trading groups, governmental and global institutions, NGOs)
Environmental
Technological
Cultural (‘westernization’, cultural diffusion, ‘globalization’)
Social (migration, social networks)
Health

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8
Q

What are the 3 main dimensions of globalization

A

Economic
Cultural/social
Political

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9
Q

What was economic form of globalization caused by?

A

increase in free trade
growth of transnational corporations
faster, cheaper transport
global marketing

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10
Q

What is economic form of globalisation characterized by?

A

long distance flows of goods, capital and services as well as information and market exchanges

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11
Q

What cultural/social form of globalization caused by?

A

migration
global communication networks
impact of western culture through media, sport, leisure and celebrity

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12
Q

What is cultural/social form of globalisation characterized by?

A

spread of ideas, information and images

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13
Q

What is political form of globalisation caused by?

A

growth of Western democracies and their influence on poorer countries
decline of centralised (communist) economies (though communist political control is still strong in China and Russia)

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14
Q

What are the characteristics of political form of globalisation?

A

the diffusion of government policy and development of market economies in former communist states

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15
Q

Define capital

A

Capital refers to all money that moves between countries which is used for investment (for example in land and physical capital) trade or production

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16
Q

Briefly explain Franks’s ‘Dependency Theory’ and Wallerstein’s ‘World System Theory’ models. (Core area and periphery area)

A

These models assume that global power is concentrated in blocks of highly developed economies (HDEs), which they called the ‘core’. Periphery countries are those with less developed economies (LDEs), which have been exploited and have suffered from a lack of investment, leakages and out-migration.

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17
Q

Is there still a present clear distinction between ‘core’ and periphery countries?

A

No. The rapid growth of large and medium emerging economies such as the BRIC and, more recently, MINT countries means there is now more of a continuum of development.

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18
Q

Define BRIC

A

An acronym used to identify a group of four countries – Brazil, Russia, India and China – whose economies have advanced rapidly since the 1990s. Sometimes South Africa is added to this list so the acronym becomes BRICS.

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19
Q

Define diaspora

A

A large group of people with a similar heritage or homeland who have moved and settled in places all over the world.

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20
Q

Define economic leakage

A

Refers to a loss of income from an economic system. It most usually refers to the profits sent back to their base country by transnational corporations – also known as profit repatriation.

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21
Q

Define MINT

A

An acronym referring to the more recently emerging economies of Mexico, Indonesia, Nigeria and Turkey.

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22
Q

Outline 4 main flows of capital

A

Foreign Direct Investment
Repatriation of profits
Aid
Remittance payments

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23
Q

Define FDI

A

This is investment made mainly by TNCs (sometimes by governments) based in one country, into the physical capital or assets of foreign enterprises.

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24
Q

Explain repatriation of profits

A

TNCs investing in overseas production will normally take any
profit made from that investment back to their home-country.

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25
Q

How aid can be provided and why it is regarded as a flow of capital?

A

This is an important source of financial support for poor countries.

It can take many forms and can be provided through the UN (multilaterally) from contributions made by a number of richer countries. It can also be provided bilaterally from one government to another, usually with mutual co-operation conditions applied.

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26
Q

Why out-migration is viewed as a disadvantage of globalisation, especially by LDEs?

A

This exacerbates disparities as the less developed nations lose their most skilled and talented labour, who will pay taxes and spend much of their earnings in their destination country.

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27
Q

Define remittances payments

A

These are transfers of money made by foreign workers to family in their home country.

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28
Q

How much did India diaspora send in remittances back home in 2018?

A

US $79 billion

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29
Q

What is a a general pattern of remittances distribution?

A

The net flows of remittance payments are generally sent from wealthy and resource rich economies to developing economies.

30
Q

Name example of countries where remittances surpass 25% of total GDP

A

Tonga, Kyrgyz Republic, Tajikistan and Nepal

31
Q

Outline two advantages of remittances

A

● present a more stable and steadily rising source of income, unlike
FDI which fluctuates and dips significantly during recessions
● are an effective way to alleviate poverty because they go directly to families.

32
Q

What reduces benefits of remittances as a source of income?

A

The high charges made by banks, post offices and other transfer agencies for sending the money.

The global average cost for sending $200 in 2019 was around
7 per cent but it can be as high as between 15 to 18
per cent for some transfers.

33
Q

What is an alternative for migrants to invest in their home countries?

A

Diaspora bonds, which can be used to finance development

34
Q

Why Labour markets are less free flowing than financial markets?

A

People move less easily around the world than money because of restrictions on immigration.

35
Q

What is a recent pattern in flow of labour?

A

Much of the movement has been from developing countries in South Asia, Africa and Latin America to the richer areas of North America and Europe. Another major destination for the movement of labour has been around the oil-rich Gulf States of Kuwait, Qatar, Bahrain, Saudi Arabia and the United Arab Emirates.

36
Q

Outline 3 key facts about the inter-regional movement of labour

A

● Despite increases in cross-border movements, most
migrants move over short distances within the same region or between neighbouring regions (especially in sub-Saharan Africa).
● The largest inter-regional flow of labour is in Asia. Between 2010 and 2015, around three million workers moved from south Asia to west Asia.
● The second largest inter-regional flow is from Latin America to North America.

37
Q

What is a pattern of labour flows in the Asia region?

A

The largest inter-regional flow is between south and west Asia. Around three million migrated from India, Pakistan and Bangladesh to the Gulf states of Qatar, Saudi Arabia and the UAE.

38
Q

Why did flow of manufactures goods increase significantly in recent years?

A

This has been stimulated by demand from affluent populations in developed countries, combined with low production costs because of mass production and low wage economies in exporting regions in China and South East Asia.

39
Q

Outline factors (4) that facilitated recent increase in international movement of manufactured goods

A

Reduced transaction costs
Reduced transport and time costs
Reduced tariffs
Establishment of the regional trade blocs

40
Q

Why were transport and time costs of the manufactures goods movement reduced?

A

Transport and time costs have been reduced by the process of containerisation which has enabled more complex and long distance flows of products, and air transport, which can speed delivery and reduce costs of more valuable or perishable cargo.

41
Q

Why establishment of regional trading blocs facilitates movement of manufactures goods?

A

Regional trading blocs provide tariff-free trade or other favourable trading conditions to fellow member nations within the bloc.

42
Q

Define containerisation

A

A system of standardised transport that uses large standard-size steel containers to transport goods. The containers can be transferred between ships, trains and lorries, enabling cheaper, efficient transport.

43
Q

Define protectionism

A

A deliberate policy by government to impose restrictions on trade in goods and services with other countries – usually done with the intention of protecting home-based industries from foreign competition.

44
Q

Define tariffs

A

A tax or duty placed on imported goods with the intention of making them more expensive to consumers so that they do not sell at a lower price than home-based goods – a strategy of protectionism.

45
Q

Define services

A

Services are economic activities that are traded without the production of material goods, for example, financial or insurance services.

46
Q

How can services be sub-divided?

A

high level services – services to businesses such as finance, investment and advertising
low level services – services to consumers such as banking, travel and tourism, customer call centres or communication services.

47
Q

Define 3 recent patterns in distribution of the high-value service flows

A

● High-level services are concentrated in cities in the more developed world, such as London, New York and Tokyo, which are the major centres of global finance.
● With the emergence of east Asian economies, Hong Kong, Singapore and Shanghai have also become major global financial centres.
● A growing number of transnational service conglomerates have emerged, seeking to extend their influence on a global scale, such as HSBC Holdings in banking, AXA (France) in insurance, WPP Group (UK) in advertising and TUI Group (Germany) in travel and tourism.

48
Q

What is the trend in distribution of low-value services?

A

One trend has been the decentralisation of low level services from the developed to the developing world.

49
Q

Provide an example of recent trend in re-distribution of low level services

A

Call centre operations, for example, have moved from the UK to India where labour costs are up to 20 per cent lower than in the UK.

Much of India’s economic success can be attributed to its growing service sector, especially information technology and online customer services, which provide support for companies in high-income countries (also known as ‘outsourcing’).

50
Q

What are information flows dependent on?

A

Information flows are governed by the movement of people through migration and by the speed of data and communication transfers.

51
Q

What are nor flows of information supported by?

A

● improvements to global telephone networks, making
communication cheaper and easier

● mobiletelecommunicationtechnology

● email and the internet, which enable large amounts
of information to be exchanged instantly across
the globe

● live media coverage available on a global scale
because of satellite technology.

52
Q

Why flows of information should not be undermined?

A

The importance of information flows should not be underestimated because of their contribution to the expansion of knowledge-intensive goods and services (also known as the quaternary sector of an economy).

53
Q

Define conglomerates

A

A collection of different companies or organisations which all report to one parent company – most transnational corporations are conglomerates.

54
Q

Define economies of scale

A

The cost advantages that result from the larger size, output or scale of an operation. Savings are made by spreading the costs or by rationalising operations.

55
Q

Define marketing

A

Marketing is the process of promoting, advertising
and selling products or services.

56
Q

What is a marketing strategy of a firm that is a global marketer?

A

When a company becomes a global marketeer, it views the world as
one single market and creates products that fit the various regional marketplaces.
It will usually develop a recognisable ‘brand’ and employ one marketing strategy to advertise the product to customers all over the world.

57
Q

Give an example of a company that is global marketer

A

Coca-Cola is an example of a company with a single product

The company uses the same formulas (one with sugar, the other with corn syrup) for all its markets. The bottle design is recognisable in every country but the size of bottles and cans conforms to each country’s standard sizing.

58
Q

What is an new international division of labour created by globalisation?

A

● the highly skilled, highly paid, decision-making,
research and managerial occupations which, on a global scale, are largely concentrated in more developed countries

● the unskilled, poorly paid assembly occupations, which have become increasingly located in newly industrialising countries, which have lower labour costs.

59
Q

Outline the characteristics of the newly industrialized countries

A

These countries have developed their own industrial and commercial bases as well as markets for their own goods and services.
TNCs have also emerged from these countries and have extended their global influence.

60
Q

Outline the groups of newly industrialized countries

A

the four Asian ‘tiger’ economies of Hong Kong, Singapore, South Korea and Taiwan, which were followed in succession by the BRIC economies

61
Q

What is the production pattern over the past 40 years?

A

Over the past 40 years, manufacturing has become decentralised, moving away from the highly developed economies (HDEs) of Western Europe, North America and Japan.
As a result of foreign direct investment by TNCs, many emerging economies have been able to develop competitive manufacturing industries.

62
Q

By which factors was global shift in the pattern of production driven

A

● lower land and labour costs
● incentives offered by governments, in the form of tax breaks or special economic zones, have encouraged TNCs to invest and relocate the production side of their business abroad
● the transfer of technology by TNCs has enabled countries in the developing world to increase their productivity, without raising their wages to the same levels as HDEs.

63
Q

What is a consequences of the global shift in production factors?

A

Deindustrialisation in richer HDEs and a subsequent decline and loss of jobs in the manufacturing sector.

64
Q

How did government react to deindustrialisation in HDEs?

A

● encouraging foreign TNCs to invest in deindustrialised regions by offering incentives, such as tax breaks
● encouraging investment in skills and technology to upgrade manufacturing industry
● adopting more protectionist policies, such as import tariffs, to protect domestic production (this can prove counterproductive as it makes home industries uncompetitive globally).

65
Q

What is a predominant distribution and consumption factor?

A

Product consumption still lies predominantly in the richer countries of the developed world. Products being manufactured in emerging NIC economies are largely exported and sold to countries in Europe, North America and Japan

66
Q

What change is currently being experienced by the pattern if distribution and consumption and why is it occurring?

A

As emerging NICs develop, their populations are becoming more affluent and are starting to demand similar consumer products to those being exported from their own countries.

67
Q

Explain the current shift in the pattern of distribution and consumption on the Dyson example

A

Dyson, a UK-based manufacturer of household electronic goods, moved the manufacture of its products to Malaysia in 2002 and its headquarters to Singapore in 2019. It still sells the bulk of its products in the UK and other parts of Europe but
75 per cent of its significant growth in 2017 came from its Asian market and only one-fifth from Europe.

68
Q

Outline 3 largest on summer markets in the world

A

1 USA - 29%
2 Japan - 8.5%
3 Germany and China - 5.3%

69
Q

Outline 3 top countries by share of global manufacturing output

A
  1. China - 28.4%
  2. United States - 16.6%
  3. Japan - 7.2%
70
Q

Outline 4 distinct features of the forecast for the future pattern of distribution and consumption

A

● the USA, western Europe, Japan and China will continue to be the best destinations for exporters
● as Asia becomes more competitive a growing share of the region’s exports will be to other countries in Asia
● China’s ‘Belt and Road Initiative’ will open up access and diversify its exports to emerging markets
● finance corporations from HDEs have the potential to benefit from the expansion in financial services in the Asia-Pacific region but will face increasing competition from Chinese, Singaporean and Korean banks and insurance companies.

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