Factors Facilitating Globalisation Flashcards
what are the 3 factors facilitating globalisation
- liberalisation of markets
- advances in tech (transport/communication)
- rise of the multinational corporation
- define liberalisation of markets
reduction of gov regulation/restriction in an economy on free exchange between markets
- what is the GATT
general agreement on tarriffs and trade - reduces barriers to trade to increase living standards and promote full employment
- what is the WTO
replaced GATT in 1995 - ensure trade flows as smoothly and freely as possible
- what are some regional groups and what do they do for trade liberalisation
EU, NAFTA, ASEAN - encouraged exapansion of free trade by reduced barriers in there areas
- what is meant by the term dead of distance
transport costs/travel time have been cut to boost volume of goods trade + tourism
- how have IT advances helped globalisation
enavled growth in trade in services that were once considered non-tradable have been outsourced in countries like India (accounting, marketing, IT support)
- what is a multinational corporation
very large firms with headquarters in one country and subsidiaries in one or more other countries that establish production or retail and distribution facilities globally
- what are example of MNCs and what percentage of global GDP do MNCs account for
US - Apple, Nike, Microsoft
JAP - Toyota, Sony
AUS - BHP, Rio Tinto
25% of global GDP
- why have MNCs expanded into foreign markest
to increase sales, marketer share and profits by exporting to foreign locations/establishing subsidiary through FDI
- When does FDI giving examples of how a developed and a developing country FDI
occurs when a firm in 1 economy aquires at least 10% ownership of a foreign firm
developed - mergers/aquisitions
developping - construction of new facilities (greenfield investment)
