Globalisation Flashcards
Enquiry Question 1
Define Transnational corporations
Company that operates worldwide
Define gross domestic product (GDP)
All the money a country earns per year
Define emerging economies
Countries that are newly industrialised
Define remittances
Money sent back to the home country
Define interdependency
Becoming reliant on something
Define globalisation
The integration of countries around the world (global connection)
Positives + negatives of globalisation
Positives:
•Technology - travel, phones, internet
•Speed of exchange - travel, communication
•Take advantage of conditions - made cheaper bought cheaper
•connections are lengthening
•connections are faster
•connections are deepening
Negatives:
•When companies move to other poorer countries, people in the richer country lose jobs, the other country gain jobs but are low paid so remain poor
•Climate change - transport - co_2 - global warming
Define shrinking world effect/the time-space compression
The world begins to feel smaller as travel times reduce
What developments have accelerated the ‘shrinking world’?
•transport has allowed the value of trade to increase
•large manufacturing companies (Ford + General Motors) able to export products more widely
•steam power, railways, telephone + telegraph, jet aircraft, container shipping
•internet - link computers
•GIS + GPS (global internet/position system) - deliveries can be tracked by companies
•broadband - large amounts of data moved fast through cyberspace
•fibre optics
Case study for globalisation through transport?
EasyJet
Define tariff
A tax imposed on imports
Define subsidy
Financial assistance to a business by government to make it competitive or prevent collapse
Define quota
A limit on the quantity of a good a country allows into the country
Define protectionism
Policies to protect businesses and workers in a country by restricting/regulating trade with foreign nations
Define free-market economy
A market economy based on supply and demand with little or no government control
Define free-trade
A policy where a government does not interfere with imports or exports by applying tariffs, subsidies or quotas
Define privatisation
Transferring ownership of a public service/ agency/ property into private ownership run for profit
Define neoliberalism
a political philosophy of free markets, free made, privatisation and increasing the role of busness in society (While decreasing the influence of government).
What does SAP’s stand for
Structural Adjustment Programmes
Problem with governments removing barriers
•TNC’s see a profit and want to invest as costs are reduced
•TNC’S bring new ideas, products, cultures etc
•The TNC will geneate wealth
•This will incresse sandard of life + demand for foreign products
•Country become interconnected + interdependent on eachother.
What does FDI stand for
Foreign Direct Investment
Define offshoring
TNCs build new production facilities in ‘offshore’ low wage economies (Nike, coca-cola, Fender)
Define foreign mergers
Two firms agree to work together (Royal Dutch Shell - headquarters in UK + Netherlands)
Define foreign acquisitions
TNC launches a takeover of a company in another country (Cadbury - owned by American company)
Define transfer pricing
TNC channelled profits through a subsidiary company in the low tax country such as Ireland (Starbucks + Amazon)
Three examples of free trade
•World Trade Organisation
•IMF
•World Bank
Trade blocs?
(intergovernmental agreement)
•use trade for economic stability - want free trade with each other - this meant tariffs on other countries
•economies of scale increased - cheaper
•foreign mergers within the trading bloc
Types of trade blocs
•preferential trade area - lower barriers among members
•free trade area - eliminate internal barriers but mainin inderpendant external barriers - NAFTA (North American Free Trade Agreement)
•customs union - eliminate internal barriers, agree on common external barriers - EU
•common market - eliminate internal barriers, adopt common external barriers, allow free movement of resources among member countries - Mercosur
•economic union - eliminate internal barriers, adopt common external barriers, free movement of resources, and a uniform set of economic policies - EU
•full integration - US
2 case studies of policies used to globalise
•UK
•China
What does LDCs stand for
Least Developed Countries
Ways to measure globalisation
•A.T. Kearney World Cities Index
KOF index
What is a winner
Switched- on/globalised
What is a loser
Switched-off/not globalised
What factors prevent being switched on
•physical
•human
•challenges