Factors affecting globalisation Flashcards
What is globalisation a result of?
New systems, technology and relationships.
What are systems?
Systems include ways of working, procedures and methods of organisation that allow a particular function to be carried out e.g. JIT
How have new systems being introduced, made it easier for globalisation to occur?
New systems have made flows of information, capital, products, services and labour easier to cross borders.
How has new technology helped develop globalisation?
The technology used for information, communications and transport has advanced rapidly. The internet allows people from all over the world to access info on other places, and aeroplanes allow people to be transported around the world efficiently.
How have new relationships promoted globalisation?
Before WW2 most relationships between countries involved one country gaining and the other losing, now countries engage in trade and follow common rules; countries have come together to form rules to help for the common good.
What is the global financial system?
This is a system that governs the flows of capital between countries.
What are financial systems based on?
The relationship between those who borrow money, those who invest money and the institutions that hold, give out and take in this money - investment banks.
What is the main role of investment banks?
To help companies raise capital by selling shares on behalf of those companies. The people who buy shares are investors and they receive a fraction of the profits that the company makes
How has information technology made the financial system more global?
Information Technology, such as the internet has given investors and banks more information on business performance, meaning people can invest with more certainty, so more people are likely to invest globally increasing capital flows.
How has financial deregulation made the financial system more global?
Governments have relaxed rules over what banks can do, such as charging interest and letting banks invest in more businesses, it has also removed barriers to capital flows between countries making it easier for banks to trade shares internationally, expanding capital flows.
- Also allowed banks to sell shares globally and exchange currencies between countries to allow for more international trade
How have financial technologies globalised the financial system?
Financial technologies
Financial technology has made financial information and money easily accessible for people
across the world, deepening the connections between countries:
● Communication technology has allowed banks to communicate across the world,
allowing for banks to have global branches with customers all over the world. This
technology also allows companies to invest offshore, and still manage/collect their profits
from overseas.
● The internet is also a type of financial technology, as it allows people to transfer money,
be that for buying/selling products, remittances, or investments.
● Cryptocurrency (encrypted digital currency) has been developed, which has created a
whole new market for online currency and trading
What is the global trade system?
The system that governs the flows of products between countries.
How is trade regulated?
Mostly by countries governments, who control which products go into a country at what price.
What are some forms of trade regulation governments have?
Tariffs, non tariff barriers and banning of products and quotas.
What is the purpose of the controls governments have over trade?
It makes it more expensive for foreign businesses to export their products to a country increasing prices for consumers, making it harder for foreign companies to succeed.
How can businesses make exporting their goods cheaper?
By exporting to a country with a trade agreement with the businesses country.
What are trade agreements? Who does it benefit?
Countries mutually agree to remove trade barriers. It benefits both countries some companies and all consumers
What are trade agreements between two countries known as?
Bilateral trade agreements.
What are multilateral agreements? What makes up the global trade system?
Multilateral trade agreements are trade agreements between several countries-all of the countries involved agree to remove tariffs and other controls. Multilateral and bilateral agreements together make up the global trade system.
What is the global trade system governed by? What is their purpose?
The global trade system is governed by the world trade organisation established in 1995 the WTO sets rules on how countries can trade with each other e.g. To stop countries-from imposing unfair tariffs on each other’s company’s. It also allows countries to negotiate trade deals with each other and settled through disputes
How have transport and communication systems enhanced globalisation?
Improved transportation systems e.g. high speed rail networks, larger and faster ships and faster planes have allowed people and products to get to places around the world more easily than ever before.
How has containerisation enhanced globalisation?
Uniform metal containers otherwise known as shipping containers were introduced in the 1950s this allowed more goods to be loaded on to ships at once and transferred straight onto other forms of transport e.g. trains. This is made it easier for goods to be moved quickly and cheaply around the world
How have communication satellites allowed for increased globalisation?
Communications satellites were first launched into earth orbit in the 1960s. They allow relatively cheap wireless communication between two devices, regardless of where they are. This means even people and companies even in rural or urban areas can access the Internet and communicate with others.
How have optic fibre cables allowed for increased globalisation?
Optic fibre cables use signals of light to transmit more information than any other cable. They allow for fast communication between two devices, allowing almost instant communication between two people or companies.
