Globalisation Flashcards
define globalisation
Globalisation is a continuing process of creating links between societies, cultures and economies on an international scale through improving technology and communications, which allows for improvement of the global networks of trade, business, communication, immigration, aid and transportation.
what is the shrinking world?
info, goods and services can be transferred at a much faster rate due to technological and transport improvements
what is FDI?
a financial injection made by a TNC into a nation’s economy in order to build new facilities or takeover or merge with an existing business
what is the WTO?
The World Trade Organisation believes in free trade without barriers (subsidies or tariffs), known as ‘trade liberalisation’. Trade is encouraged internationally free of restriction.
what is the IMF?
The International Monetary Fund aims to maintain financial stability internationally, as well as money for development purposes.
what is the world bank?
This finances economic development, using deposits placed by the wealthier countries to loan to countries in need of development with certain conditions.
what are trade blocs?
voluntary international organisations that exist for the purpose of trading, bringing economic strength and security to nations that join. E.G. The EU and NAFTA
what are subsidies?
grants given by governments to increase the profitability of key industries e.g. Tax breaks
what is the KOF index of globalisation?
it aims to measure the rate of globalisation in countries around the globe, based on social, economic and political factors, produced by the Swiss economic institute. It surveys 191 countries It is based on how many transactions take place.
what is the AT Kearney index of globalisation?
It annually examines the underlying international trends that reveal whether the world’s leading nations are becoming more or less globally connected. The report includes detailed commentary on the markets and the impact a variety of global trade issues have on their FDI attractiveness, as well as a ranking of the top 25 countries. It only surveys 62 countries. It is calculated based upon four main indicators - political engagement, technological connectivity, personal contact and economic integration
why are TNCs important to globalisation?
The growth and expansion TNCs allows for the free flow of labour, capital, goods and services globally. The primary motive of TNCs is profit, which they achieve through developing new markets and diversifying their product range so they reach a wider audience, which can create links globally. This would require more labour, so TNCs would potentially expand production in countries, and diversify products
what is offshoring
when a company does work overseas, itself or using another company
what is outsourcing?
when work is contracted out to another company
what physical factors influence a lack of connectedness ?
- isolation
- landlocking
- lack of transport
- climate
what human factors influence a lack of connectedness ?
- Government influence e.g. North Korea
- Lack of technology e.g. Telecoms
- Poverty
- Lack of education e.g. Low literacy rate
- Conflict
- Disease e.g. Covid-19
- Religion e.g. Taliban
- Corruption
