Chapter 1 Flashcards
What is globalization?
The shift towards a more integrated and interdependent world economy
What is the globalization of markets
the merging of historically distinct and separate national markets into one huge global marketplace
T/F: there are significant differences between national makrets
True
T/F: Globalization only benefits large companies, to the expense of small companies
False
Fill in the blank: Products that serve universal needs are ___ (ex: oil)
Global
Competitors (may/may not) change among nations
May not
What is globalization of production?
Sourcing goods to take advantage of differences in cost and quality of factors of production.
Give examples of factors of production
Labor, energy, land, capital
What has allowed an advancement of outsourcing today for service activities?
Modern communications technology
What are some impediments of globalization of production?
- Formal and informal barriers to trade
- Barriers to foreign direct investment
- Transportation costs
- Political and economic risk
- Challenge of coordinating globally dispersed supply chain
Why did Global institutions emerge?
Needed to help manage, regulate, and police global marketplace
Give examples of Global Institutions
GATT, World Trade Organization, International Monetary Fund, World Bank, UN
What are 2 drivers of globalization?
- Declining trade and investment barriers
- Advanced technologies in communications, the internet, and transportation
What are some implications for…
a) Globalization of production
b) Globalization of markets
a) Locating production in geographically separate locations has become more economical
b) Cultural distance has been reduced and has brought some convergence of consumer tastes and preferences
Explain the rise of mini-multinationals
Growth in the number of medium and small-sized businesses. Internet is lowering barriers that smaller firms faced in international trade
