Globalisation Flashcards
What is the idea of a ‘flat world’ ?
It means that boundaries don’t count and that everyone has the same values
What does protectionism mean?
This means protecting your own country / nation
What two factors are the main factors of the process of globalisation?
- Interconnectedness = the drivers of globalisation
2. interdependence of countries = the emergence of NAFTA, EU etc.
What are the two types of globalisation?
- globalisation of markets - standardisation, e.g. oil, these markets are emerging
- globalisation of production - the sourcing of goods and services from locations around the world
GATT =
General Agreement on Tariff and Trade
WTO =
World trade organisation
IMF =
International monetary fund
UN =
United nations
G20 =
the group of 20
What is the GATT ?
it’s the old version of WTO, it is responsible for policing the world trading system and making sure countries adhere to trade treaties signed by member states
What is the aim of IMF and the World Bank ?
IMF- To maintain order in monetary systems and
The World Bank - aims to promote economic development
What is the aim of the UN ?
To preserve peace throughout the UN countries
What is the aim of G20 ?
It comprises the finance ministers and central bank governors of the 19 largest economies and the EU - to coordinate policy responses to financial crises in developing countries
What 2 macro level factors drive globalisation ?
- The decline in barriers to the free flow of goods
2. Technological change
What is FDI ?
Foreign Direct Investment - When MNEs make high commitment investments
What does outsourcing mean ?
Establishing a contract with a different country in a different market
What is Acquisition ?
Buying an existing country
What does Greenfield mean?
setting up your own country from scratch, more risk
Benefits of FDI?
- Promotes economic development + technology transfer - spillover effects to local firms
- Foreign capital and skills can aid host countries
Drawbacks of FDI?
- Foreign investors tend to leave when location advantages shift
- host countries cometimes lose out on jobs in FDI projects
- Trade deals tend to benefit the investing country but not the host country
What is industrialisation ?
a shift from economy based on agricultural production for domestic consumption to an one based one factory production with export potential
What is FDI inflow?
receiving FDI
What is FDI outflow?
Investing in another country
