Chapter 1: Impact of Globalization Flashcards
It is an interesting phenomenon since it is obvious that the world has been going through this process
GLOBALIZATION
it is phenomenon that cannot be simply ignored
GLOBALIZATION
Effect of globalization are classified into two broad categories
- Global market opportunities
- Global market threats
It refers to the increases of market potential, trade, investment potential, and resource accesibility
Global market opportunities
It refers to the increases in the number and level of competition, and the level of uncertainty?
Global market threats
it enable firms to access worldwide resources and expand into many new overseas markets
Global market opportunities
It can be destructive to firm performance due to an increasing number of competitors and an increase in intensity of competition coupled with higher market uncertainty.
Global market threats
Threats and opportunities in the global marketplace
- Political,
- cultural differences and
- economic environment
What are the basic principles to underpin greater prosperity
- investment
- spread of technology
- strong institutions
- sound macroeconomic policies
- an educated workforce
- existence of a market economy
a term used to describe the changes of societies and the world economy that are the result of dramatically increase trade and cultural exchange.
Globalization
It is probably no mere coincidence that over the past _____, as a number of countries have become more open to global economic forces, the percentage of the developing world living in extreme poverty— defined as living on less than ______ per day has been cut in half.
20 years; $1
The __________________ notes there are still around 1 billion people surviving on less than $1 per day-with 2,6 billion living on less than $2 per day.
UN’s Human Development Report
is a historical process, the result of human innovation and technological progress.
Economic “globalization”
It refers to the increasing integration of economies around the world, particularly through the movement of goods, services, and capital across borders. The term sometimes also refers to the movement of people (labor) and knowledge (technology) across interational borders.
Economic “globalization”
began to be used more commonly in the 1980s, reflecting technological advances that made it easier and quicker to complete international transactions both trade and financial flows.
Economic “globalization”
also offer greater opportunity for people to tap into more diversified and larger markets around the word.
Global Markets
_______ do not necessarily ensure that the benefits of increased efficiency are shared by all.
Global Markets
The value of trade (goods and services) as a percentage of world GDP increased from ___________
42.1 percent in 1980 to 62.1 percent in 2007.
Foreign direct investment increased from __________
6.5 percent of world GDP in 1980 to 31.8 percent in 2006.
The number of foreign workers has increased from __________
78 million people (2.4 percent of the world population) in 1965 to 191 million people (3.0 percent of the world population) in 2005.
be they in business or government- can draw on ideas that have been successfully implemented in one jurisdiction and tailor them to suit their own jurisdiction.
Innovators
can also create a framework for cooperation among nations on a range of non-economic issues that bave cross-border implications, such as immigration, the environment, and legal issues.
Globalization
implies that information and knowledge get dispersed and shared.
Globalization
a Nobel laureate and frequent critic of globalization, has nonetheless observed that globalization “has reduced the sense of isolation felt in much of the developing world and has given many people in the developing world access to knowiedge well beyond the reach of even the wealthiest in any country a century ago.
Joseph Stiglitz
A core element of globalization is the expansion of world trade through the elimination or reduction of trade barriers, such as import tariffs.
International Trade
often a source of economic growth for developing nations, stimulate job creation as industries sell beyond their borders.
Exports
enhances national competitiveness by driving workers to focus on those vocations where they, and their country, have a competitive advantage.
Trade
promotes economic resilience and flexibility, as higher imports help to offset adverse domestic supply shocks.
Trade
that is, engaging in protectionism generates adverse consequences for a country that undertakes such a policy.
Restricting International Trade
tends to reward concentrated, well-organized and politically-connected groups, at the expense of those whose interests may be more diffuse (such as consumers). It also reduces the variety of goods available and generates inefficiency by reducing competition and encouraging resources to flow into protected sectors.
Protectionism
the former president of Mexico, has observed that, “In every case where a poor nation has significantly overcome its poverty, this has been achieved while engaging in production for export markets and opening itself to the influx of foreign goods, investment, and technology.”
Ernesto Zedillo
At the same time, __________ have risen across virtually all regions for even the poorest segments of population, indicating that the poor are
better off in an absolute sense during this phase of giobalization, atthough incomes
for the relatively well-off have increased at a faster pace.
per capita incomes
Equally important, globalization should not be rejected because its impact has left some people ________
UNEMPLOYED
the Financial Times columnist, highlights one of the fundamental contradictions inherent in those who bemoan inequality, pointing out that this charge amounts to arguing “that it would be better for everybody to be equally poor than for some to become significantly better off, even if, in the long run, this will almost certaisly lead to advances for everybody.
Martin Wolf
One of the most authoritative studies of the subject has been carried out by World Bank economists
David Dollar and Aart Kraay
concluded that since 1980, globalization has contributed to a reduction in poverty as well as a reduction in global income inequality. Furthermore, they, found out that in “globalizing” countries in the developing world, income per person grew three-and-a-half times faster than in “non-globalizing” countries, during the 1990s.
David Dollar and Aart Kraay
who denoted that “higher growth rates in globalizing developing countries have translated into higher incomes for the poor.”
David Dollar and Aart Kraay
pointed out that “the main losers in today’s very unequal world are not those who are too much exposed to globalization.
They are those who have been lef out.
Kofi Annan
found out that on average 64 percent of those polled in 27 out of 34 countries- held the view that the benefits and burdens of “the, economic developments of the last few years” have not been shared fairly.
BBC World Services
in some developing countries, those who perceive such unfaimess are more likely to say globalization is proceeding too ______
slowly
Myths about globalization
- Downward pressure on wages
- The “race to the bottom”
- Globalization is irreversible
- Openness to globalization will, on its own, deliver economic growth
- The shrinking state
intensified and spread across
asset classes and banks, precipiating a financial shock that many have charactesized
as the most serious sine the 19
Credit Market Strains
