Globalisation Flashcards
Globalisation ?
increased integration / interconnectedness of different economies around the world
Positive Impacts of globalisation
Increased :
international movement of labour
international movement of financial capital
specialisation
international trade
trade to GDP ratios
International movement of financial capital - conglomerate integration
Merging companies that are from different industries or markets
International movement of financial capital - foreign direct investment
Investment of a firm into another country in order to gain control over the foreign firm.
International trade - Trans National Corporation
A company that has operations in 20 or more countries
Trade to GDP ratio
total value of international trade / GDP x 100
Causes of Globalisation
Improvement in transport
improvement in technology
containerisation
trade liberalisation
Improvement in transport
Easier to trade - much faster to transport goods and services
Easier movement of labour
Improvements in technology
Easier to communicate and trade because of the development of technology and software
Containerisation
Cost to transport cargo decreased
shipping costs decreased
increases efficiency
increases international trade
shift to right in the supply curve
Trade Liberalisation
reduced tariffs = reduced cost of imports = increased demand for imports and increased international trade
Impacts of globalisation on stakeholders
Individual countries
governments
producers and consumers
workers
environments
Impact on individual countries
+ Increase in living standards
+ increase in real world GDP
- specialisation - overdependence
Impact on governments
+ Increased tax revenue
- Reduced control over their economies due to international trade agreements and global market forces
+ Helps and becomes essential in areas like climate change and financial stability.
Impact on producers and consumers
+ producers gain access to larger consumer markers
- increased competition
+ consumers get a wider variety of products and lower prices
