Globalisation (1) Flashcards
What is globalisation?
A process of opening up world trade and markets to TNCs
What does globalisation involve?
- flows of capital
- flows of ideas
- communication
- trade
- flows of products
- flows of labour
How are economies of scale being affected by globalisation?
Trade and production are getting cheaper which in turn can make products cheaper.
Why flows of people increasing?
Job opportunities cause people to move around the world and holiday and leisure drive international movement.
What is globalisation influenced by?
- new technology
- communications and information systems (communication has become much easier)
- global financial systems (banks)
- transport systems
Threats of globalisation:
- possible spread of disease globally
- security has become easier to breach as measures have been reduced
What influences countries financial position?
- Past occupation and colonisation may alter a countries finance. Countries involved in running colonies are generally rich in the modern-day while those involved such as India and Nigeria (members of the British colony may be LICs.
- corruption
- disease
Advantages of international trade?
- Economies of scale make production cheaper and allow more production
- Increasing trade increases competition leading to competitive pricing and lower prices for consumers
- increased competition decreases chances on monopolies forming
- transfer of technology can increase global conditions and efficiency and save money
- increased employment and job creation
Disadvantages of international trade?
- Over specialisation - production may be moved to countries where it can be done more chea[ply and therefore remove jobs from the original location
- Product dumping - products may be sold so cheaply they cost more to make then sell which can lead to exploitation of goods and people
- exploiting labour-intensive areas and taking advantage of the lack of laws such as health and safety
Name some international trade blocks:
- OPEC
- EU
- ASEAN
- NAFTA
- MERCOSUR
What is FDI?
Foreign direct investment
Why do countries do FDI
HICs invest in LICs to create infrastructure and once these countries become more developed they will expect trade returns and opportunities
What is an exmaple of FDI
China investing in Africa
What is an economy of scale?
Cost advantage of large scale output of a product as savings are made by spreading out the cost over more units
What are international flows of capital?
All financial transfer between companies for investment, trade or production
What are remittances?
Transfers of money from migrants to relatives back home