global flows - capital Flashcards
how are global flows linked to globalisation?
they are ways of connecting countries, enhancing interdependence
what do capital flows refer to?
capital flows refers to the movement of money between countries that is used for investment, production and trade
what is capital flows used for?
investement, production and trade
what is the deregulation of financial systems?
occurred in late 20th century, it was when the financial institutes where no longer confined to national borders
banks and insurance companies were able to invest in other countries
what is the core-peirphery model?
it shows the flows of capital between core and periphery regions
who created the core periphery model
wallerstein and frank
why is the CP model outdated?
due to the number of emerging countries
mint bric
what are the types of flows of capital?
remittances repatriation aid migration fdi
what is fdi?
an investment made by an individual or company into another country for profit
who is FDI mostly made by?
TNCs
how might a company invest abroad?
setting up a subsidiary company, acquiring shares ro through merging
what is repatriation?
when a company abroad take profits made in one country and send it back to their home country headquarters
what is repatriation also called?
economic leakage?
how does repatriation increase disparities between core and periphery countries?
it takes money from poorer countries and sends it back to hq which is normally located in a richer country
what is aid?
an important source of financial support for poorer countries
how could aid be provided?
multilaterally e.g. by the un
bilaterally one country to another (uk donated to us in katrina)
how does migration increase disparities
the poorer countries will lose their most skilled workers and pay tax and spend money in richer countries
also remittances
what are remittance transfers?
the transfer of money made by foreign workers to family back in their home country
which country receives the most remittance payments?
india
what is significant about remittance payments to developing countries?
they are the second most important source of income
