Globalisation Flashcards
Economic Definition of Globalisation
The process by which markets and production in different countries are becoming increasingly dependent due to the dynamics in trade of goods and services, and flows of capital technology.
Oxford Definition of Globalisation
Growth to a global or worldwide scale
Characteristics of Globalisation
Free trade, MNCs, greater integration, increased trade
Reasons for Globalisation
ICT, labour availability+skills, freedom of trade (e.g. EU), more efficient, comparative advantages
Pros of Globalisation
strong trade, economic growth, lower production costs, rising living standards, increased efficiency, high innovation and productivity etc.
Cons of Globalisation
Job losses through structural change, exploitation of market in dev. countries, income distr. irregularity
Explain ‘labour ability + skills’
countries such as China have lower labour costs and higher skill levels - more efficient to trade rather than in AUS where labour ability is lower
Define “Multinational Corporation”
A corporation or enterprise that manages production or delivers services in more than 1 country.
Give three examples of MNCs
apple, coca-cola, microsoft inc etc.
Provide characteristics of MNCs
foreign investment, international production/trade, identifiable, sells in global markets etc.
Advantages of MNCs
create wealth/jobs globally, enable lower avg. prices for consumers, large profits used for research (innovation), ensure minimum standards
Define ‘foreign investment’
owns/controls income gathering assets in more than 1 country
Define ‘minimum standards’
consumer expectation’s fulfilled e.g. mcdonalds menu similar in all countries
Disadvantages of MNCs
take advantage of cheap labour/need for jobs in dev. countries, only interested in profit at expense of consumer, monopolise market, hard for local firms to thrive, contribute to pollution
Reasons for anti-globalisation protests
People get upset by power/greed of MNCs, dislike gap between rich + poor, exploitation of finite resources
