Ch 16- Globalisation Flashcards
Globalization
Where the world becomes interconnected due to increased trade and culture change
Has resulted in
Increased international trade
Free movement of capital, goods and services
Global markets eg McDonald’s
Transnational company
Carries out its business in other countries as well as its own
Subsidiary
Branch of a business
Development of globalization
Increased demand for variety of goods Technology makes it easier for countries to communicate Trade barriers have been reduced Transport improvements Decreased transport cost
Delivery system
How a product gets transported form the manufacturer to the consumer
Types of delivery systems
Road
Rail
Sea
Air
Road
Advantage: minimum handling of goods Door to door deliveries Disadvantage: roadworks cause delays Not good for environment Not suitable for bulky goods
Rail
Advantage: bulky goods
Disadvantage: not flexible. Not every town has a railway station
Sea
Advantage: bulky goods worldwide Cheaper than air Disadvantage : slow Weather can cause delays Must link with other form of transport
Air
Advantages: fast
Suitable for perishable goods
Disadvantage: expensive
Must link with other form of transport
Foreign direct investment
When a foreign company invests in a country
Free trade
When countries can trade with each other without any barriers
Factors that attract TNC to a country
Cheap raw materials
Low Corp tax
Good transport links
Cheap labor supply
Positive impacts of globalization
Employment
Spin off- tncs bring wealthy and foreign currency to local economies when they buy local products to
