globalisation Flashcards
what is the definition of globalisation?
globalisation refers to the freer movement of goods, services, investment, ideas and people around the world. globalisation is best defined as a process of deeper economic integration between countries.
what are the causes of globalisation?
- liberalisation of markets to the flow of goods, services and investment
- technology
- multinational corporations
what are the positives of globalisation?
- improved economic welfare
- more variety
- lower prices
- increased competition
- access to foreign investment
what are the negatives of globalisation?
- imposes costs on poorer economies
- income inequality increases
- job losses
- environmental damage
- child labour
- erodes democracy
what are the economic indicators of globalisation?
- exports of goods and services
- inward FDI net inflows
what are the social indicators of globalisation?
- fixed internet subscribers
- mobile phones
- international tourist arrivals
what is the first australian link?
goods and services increase
what is the second australian link?
tourism is now the 11th largest and education is the 4th largest
what is the third australian link?
global economy has lead to immigration which increased skilled labour and stimulated population growth
what is the fourth australian link?
foreign investment complimented domestic saving and funded GDP
what happened in the second half the last century?
rapid growth in world trade
what happened to exports between 1990 and 2013?
increased 500%
what happened to world GDP between 1990 and 2013?
increased 70%
why has their been a surge in world exports since 2002?
rapid industrialisation in developing countries
what is the relationship between trade and economic growth?
their is a positive relationship. a rise in world trade results in rising per capita income
what percentage of GDP was exports in 1990 and 2013 respectively?
20% then 30%
how much has GDP per capita increased since 1990?
60%
what has increased trade density resulted in?
it has been an important catalyst for increased real income and living conditions
what are multinational companies?
very large firms with headquarters in one country and subsidiaries in one or more other countries
how are MNC’s important drivers of globalisation?
they embody simultaneously the international transfer of capital, highly skilled labour, technology, and final and intermediate products
why do firms expand into foreign markets?
increase sales, market share and profits. benefits the recipient country through transfer of technology and benefits the parent firm through boosting the global brand. also gets rid of the disadvantages of exporting.
what are the benefits of MNC’s?
- inflow of investment
- assists the host company
- improves quality of production
what are the costs of MNC’s?
- exploit the market and reduce local competition
- profits flow back to the home not the host company
what are the controversial issues concerning MNC’s?
offshoring/outsourcing