Globalisation Flashcards
What is globalisation?
The process of the world’s economies, political systems and cultures becoming more strongly connected to each other
What is a core region?
Highly Developed Countries (HDE’s)
What is a periphery region?
Less Developed Economies (LDE’s)
Name two model’s that include references to Core and Periphery regions?
- Frank’s ‘Dependency Theory’
- Wallerstein’s ‘World System Theory’
Why is it harder to distinguish between core and periphery regions?
There are rapidly developing countries that blur the line e.g. BRICS and MINT member states
What is FDI (Foreign Direct Investment)?
Investments generally made by TNC’s (sometimes government’s in China’s case) based in one country, into the physical capital or assets in foreign nations
What direction does capital from FDI generally flow?
From Core to Periphery regions
What is repatriation of profits?
Profits earned by TNC’s operating overseas will generally be taken back to their home country
What direction does capital from repatriation of profits flow?
From Periphery to Core regions
What is aid?
Funding provided from an IGO or government to a foreign nation for any number of reasons e.g. bilateral, tied, voluntary multilateral
What direction does capital from aid flow?
From Core to Periphery regions
Give an example of a medium by which aid flows
- the UN collects contributions made by a number of richer countries (multilateral aid) sometimes known as Official Development Assistance (ODA)
- The World Bank
What is the difference between the IMF and the World Bank?
- The world bank provides development loans at low interest rates
- The IMF maintains global financial stability and promotes free trade
What impact does migration have on periphery regions?
Exacerbates disparities between Core and Periphery regions, as nations lose their most skilled and talented labour
What is diaspora?
A large group of people with a similar heritage or homeland who have moved and settled in places all over the world
What are remittance payments?
Transfers of money made by foreign workers to family in their home country
What country is the top recipient of remittance payments?
India - $79 billion dollars in 2018
What direction do remittance payments flow?
From Core to Periphery regions
Give 2 leakages in flows of capital?
- Remittance payments
- Repatriation of profits
How high were remittances in 2018?
$529 Billion - more than 3 times the volume of ODA
Give 5 mediums for the flow of capital in globalisation?
- FDI
- Repatriation of Profits
- Aid
- Migration
- Remittance Payments
How much has FDI increased by from 1996 to 2016
$400 billion - $1500 billion
How do the flows of capital promote globalisation?
Increasing flows of capital are making the world more interconnected e.g. most countries’ economies are now dependent on flows of investment to and from other countries
How do the flows of products promote globalisation?
Products manufactured in Periphery regions where labour is cheaper are sold to Core regions where capital is more abundant making countries around the world more dependent on one another
How are flows of products facilitated and encouraged?
- Transaction costs have been reduced by improvements the ease with which capital can be transferred to pay for goods
- Transport and tie costs have been reduced by containerisation
- Regulatory barriers like tariffs are being reduced by the WTO and RTA’s
How do flows of services promote globalisation?
Increasing flows of services are making the world more interconnected
What are high level services
Services targeted at businesses, e.g. accounting, law, advertising
What are low level services
Services targeted at consumers, e.g. customer service, call centres
What feature of the service industry means they can pack up shop and move wherever they want
Footlose
Where are low level services being set up?
LDE’s where labour is cheap
Where are high level services being set up?
Cities in HDE’s e.g. London, New York
Why are flows in services increasing?
Improvements in Information and Communications Technologies (ICT) have allowed services to locate anywhere in the world and still be able to serve the needs of customers anywhere in the world
What are flows of labour?
Movements of people who participate in the workforce from one country to another
How much has international migration increased by between 2000 and 2015
40%
How do flows of labour promote globalisation?
Increasing flows of people between different countries are making the world more interconnected culturally, as people bring aspects of their culture with them e.g. Chinatown
How do flows of information promote globalisation?
Information can be spread across the world very quickly and easily due to the advent of the internet:
- People are more culturally connected as people can learn about different lifestyles and cultures with social media
- This allows for people in different countries to communicate and work together, helping TNCs set up shop around the world, and making countries economically connected
Give 5 flows that promote globalisation
- Flows of capital
- Flows of labour
- Flows of services
- Flows of products
- Flows of information
What is marketing?
The process of promoting or selling products and services
What does global marketing involve?
Treating the world as a single market and using one marketing strategy
What are the benefits of global marketing?
- Economies of scale
- It is cheaper to have one marketing campaign for the whole world, rather than having a different campaign for every country
What are the impacts of global marketing?
Increased global connectedness, as people from around the world can identify common products that are globally marketed, e.g. Coca Cola
