Flows of capital Flashcards
What is meant by ‘flows of capital’?
Money which moves between countries which can be used for investment, trade or production.
What is deregulation?
Reducing rules and regulations
What did the deregulation of world financial markets in the 1980s do for businesses?
Reduced some of the restrictions on industry, making it easier to do business
Who invented the concept of core/periphery?
Wallerstein
What defines a core nation (HIC)?
High income
Industrialised
Control global markets
Skilled labour force
Need resources from periphery and semiperiphery
What defines a periphery nation?
Low income
Less skilled labour force
Export labour + Natural resources
Need investment from elsewhere
Why might core nations give money to (invest) periphery nations?
To receive cheap labour and natural resources
What are 5 flows of capital?
FDIs
Repatriation of profits
Aid
Migration
Remittance payments
What is Foreign Direct Investment?
The investment, often of TNCs into another country setting up factories or facilities in the host countries
What is repatriation of profits?
Profits of TNCs taken back to the country of origin
What is aid?
Financial support for poor countries in the form of short term or long term loans, payments, or food and emergency supplies
What is migration?
Movement of labour from poor to richer areas often the most skilled of educated migrants (economic migration)
What are remittance payments?
Transfers of money from a family member overseas sent home to support family in their country of origin
