chapter 17 globalisation

Question 1

positive impacts of globalisation

Answer 1

-employment
MNCs provide skills and jobs, especially in export processing zones where large workforces are required
-advancements in ICT
bring new tech when they go to a country, especially benefits LDCs
-economic growth in developing countries
creates delocalised employment, reduces % under the poverty line, improves standard of living
-spin off effects
MNCs infuse wealth and foreign currency into local economies, as they purchase local resources and raw materials

Question 2

negative impacts of globalisation

Answer 2

widens gap between rich and poor
-jobs that need specialist skills are done in developed countries, jobs that can be moved to lower cost countries are done in developing countries, keeping them poor
environmental impact
-soil erosion, deforestation, urban congestion, unmanaged chemicals, air pollutants
outsourcing
-takes jobs from one country to a lower cost country, cost cutting measure

Question 3

inward fdi

Answer 3

when a foreign company invests in a country, by building a factory/shop
eg Facebook in Ireland

Question 4

characteristics of MNCs

Answer 4

large size
-huge resources in terms of capital, technology, people and info
eg Apple is worth 1971bn
multi country operations
-have assets/activities in two or more countries
various objectives
-expanding market size
-access to cheaper raw materials to reduce costs and increase competitive capacity
-low cost labour

Question 5

economic reasons for MNCs

Answer 5

economies of scale
-larger= increased production efficiency, average cost per unit is reduced as units produced increases
market growth
-expands its reach into more markets, beneficial if sales have plateaued in one country
product sourcing
-flexible in sourcing their raw materials, can demand better prices/quality, can buy smaller firms to provide their materials
reduced costs
-can establish themselves in lower cost economies for low cost: labour, land, production resources

Question 6

importance of FDI to Ireland

Answer 6

directly employ over 250,000 people
spin off effects
high paid jobs in specialised work
technological advancements

Question 7

key measures to success of IDA

Answer 7

• talented workforce
• pro enterprise policy and attractive business environment (EU and Eurozone member, low corp tax)
• R&D is world leading (Ireland’s national innovation system enables collaboration between industry, academia, state agencies and regulatory authorities) (R&D tax credits)