econ Flashcards
globalisation def
Globalisation is the ever increasing integration of the world’s local, regional and
national economies into a single, international market.
globalisation involves
the free trade of goods and services, the free movement of capital and
labour and the free interchange of technology and intellectual capital.
With the spread of globalisation came more
trade between nations and more
transfers of capital including FDI (foreign direct investment). Moreover, brands
developed globally and labour has been divided between several countries. There is
more migration and more countries participate in global trade, such as China and
India, as well as higher levels of investment. Additionally, countries have become
more interdependent, so the performance of their own country depends on the
performance of other countries. This could be seen in 2008 and 2009, when the
effects of the global credit crunch spread across the globe.
Factors contributing to globalisation in the last 50 years
Trade in goods
o Developing countries have acquired the capital and knowledge to
manufacture goods. The efficient forms of transport make it easier and
cheaper to transfer goods across international borders. Some developing
countries have the cost advantage of cheaper labour, so MNCs move their
production abroad. This causes developed countries to trade with these
developing countries, so they can access the same manufactured goods.
Factors contributing to globalisation in the last 50 years
Trade and services
For example, the trade of tourism, call centre services, and software
production (particularly from India) has increased from developing countries
to developed countries.
Factors contributing to globalisation in the last 50 years
Trade liberalisation:
The growing strength and influence of organisations such as the World Trade
Organisation (WTO), which advocates free trade, has contributed to the
decline in trade barriers.
