Globalisation

Question 1

Define globalisation

Answer 1

The growing interdependence of countries worldwide through increasing the volume + variety of cross-border transactions in goods and services, freer international capital flows, and more rapid and widespread diffusion of technology

Question 2

What is economic globalisation

Answer 2

Development of economies and wealth

Largely caused by the growth of TNC’s

Question 3

What is social globalisation

Answer 3

Development of income, welfare, migration and reduction in inequality.

‘Americanisation’ + ‘McDonaldisation’ etc.

Question 4

What is political globalisation

Answer 4

Growth and spread of western democracies and their influence on poor and developing countries.

The decline of centralised economies, so more open to the outside world (China)

Question 5

What is cultural globalisation

Answer 5

Impact of western culture, art, media, sport and leisure pursuits on the world

Awareness of different culture and norms due to increased globalisation

Question 6

What is the KOF index

Answer 6

Leading Swiss economic think tank also releases a yearly globalisation index

A ranking of the most global countries based on three dimensions of globalisation: economic, social and political

Question 7

How many countries does the KOF index cover and who ranks the highest

Answer 7

122 countries

Singapore significantly higher than any other nation - huge economic integration

Question 8

What did the KOF index of 2011 show

Answer 8

Globalisation is still on the rise, driven by increased economic and political globalisation, whilst social globalisation stagnates

Question 9

Give 4 advantages of the KOF index

Answer 9

• Allows a comparing degree and changes in globalisation over a large number of countries over 30 years
• Index 2009 is available for 158 countries over the period 1970-2006
• Calculates on the basis of 24 variables
• Uses weighted individual data (a country can enter the high levels of the index, even if a value of the sub-index is not reported due to missing data)

Question 10

Give 4 disadvantages of the KOF index

Answer 10

• The results sometimes were driven by extreme outlying observations and missing values
• Cultural globalisation mostly refers to the domination of US cultural products
• Anything to do with trade is hard to measure as many countries don’t know the size of their informal economy (black market).
• Some countries remain neutral and do not join international organisations (Switzerland) - this does not mean they are any less globalised

Question 11

Define flows of capital

Answer 11

Refers to the movement of money for the purpose of investments, trade or business production, including the flow of capital within corporations in the form of investment capital - capital spending on operations and research development.

Question 12

What is FDI

Answer 12

Foreign Direct Investment

An investment in the form of controlling ownership of a business in one country by an entity in another

Question 13

Give 5 ways capital is transferred around the world

Answer 13

FDI 
Repatriation of profits 
Aid
Migration 
Remittance payments

Question 14

What is repatriation of profits

Answer 14

Companies with profits made in foreign countries under a different currency periodically repatriate their profits into the company’s home currency

Question 15

Define flows of labour

Answer 15

The number of people moving in/out of jobs and into/out of being employed

Question 16

Why have flows of labour increased over time

Answer 16

Social Media/Internet 
TNC's 
Overcrowding 
Transport 
Advertisement

Question 17

Despite increases in cross-border movements, most migrants move over……distances within the……region or between neighbouring regions

Answer 17

Short

Same

Question 18

Give the largest regional flow of labour in the world

Answer 18

Asia

Between 2005-10, 5 million workers moved from SOuth to West Asia

Question 19

Define flows of Products

Answer 19

FLows of manufactured goods

Question 20

Why have flows of products increased over time (5)

Answer 20

1) DEMAND
- Better connections so more accessible to increase demand
- Advertising

2) COSTS
- Increase in products produced, lower prices
- Increased competition will drive costs down
- Cheaper flights and transport

3) TRANSPORT
- Development in planes and transport
- Freezer can keep food ripe
- 200 million container movements each year

4) TIME
- Less time to ship products
- Wider communication (telephone)

5) TRADE + TARIFFS
- Tariffs reduced for countries in trade blocs
- Leads to overall decrease in flow of productivity as trade blocs don’t include poorer countries

Question 21

Define Flows of Information

Answer 21

The complex and extensive flows of information used for communication, power exchange (online order) and symbolic change (education)

Question 22

Give 3 different ways information flows worldwide

Answer 22

Communication, power exchanges, symbolic exchanges

Telecommunication systems (postal, internet, radio)

Global cities as main hubs

Question 23

Define global marketing

Answer 23

Process of promoting, advertising and selling products or services.
Views the world as a single market and creates products that fit the various regional marketplaces.

Ideal - sell one product across the world, generating economies of scale for the organisation, reducing their costs and increasing profits

Question 24

Define glocalisation

ANd give 4 examples for McDonald’s

Answer 24

The production of a global good that is adapted to the local market

• Fish burgers for Catholics in the 1970’s, so they could still eat there on Fridays
• No beef products in India as cows are sacred
• Introduction of salads and wraps as a healthy option
• Beer in Germany

Question 25

How does the glocalisation of products contribute to globalisation

Answer 25

Allows the companies to operate on a wider scale on the world

Question 26

Give the timeline of key events in globalisation

Answer 26

Smoke signals - Stone Age

Letters - Ancient Egypt

Carrier Pigeons - Ancient Rome

Telephone - 1876

Wireless - 1896

Satelite - 1929

Fibre Optics - 1966

Worldwide Web - 1989

Question 27

Give some positive impacts of globalisation on social

Answer 27

• Local societies have gained enormously in cultural diversity
• Global retail change and new types of modern architecture

The Internet allows some local cultures to survive and strengthen, musicians from Mali use YoTube to keep mali’s tradition alive

Question 28

Give some negative impacts of globalisation on social

Answer 28

Globalisation has sometimes led to conflict between different cultures

Sweatshops

Some traditions have struggled to survive, with some languages becoming extinct as more young people speak English or Spanish

Question 29

Give some positive impacts of globalisation on economic

Answer 29

McDonald’s use a joint venture, half local stores are Indian owned, so half the profits stay in India

China and India sometimes pay their workers as much as £500 a month for producing App;e phones and other goods

Over half a billion people in China have escaped poverty, following their leader’s decision to embrace globalisation

Many African countries like Nigeria are finally achieving strong economic growth

Question 30

Give some negative impacts of globalisation on economic

Answer 30

Outsourcing takes traditional factory jobs away from cities like Sheffield and Detroit

Sweatshops may earn less than £2 per day

The proportion of people living in poverty in Sub-saharan Africa has not changed

Question 31

What is a Trade Bloc

Answer 31

A type of intergovernmental agreement, often part of a regional intergovernmental organisation where international barriers to trade are reduced or eliminated among participating states

Question 32

Give 5 Trade Blocs

Answer 32

EU - most powerful in the world, GDP nearly as large as the USA

APEC - Asian pacific Economic Corporation, its 21 members account for 45% world trade

CAIRNS - Group of agricultural exporting nations

G20 - rapidly growing companies powerful enough to challenge the EU and USA

NAFTA

Question 33

What is Economies of Scale (from Trade blocs)

Answer 33

The advantage companies gain because of increased sales

There’s a larger market for all companies within the trade bloc because its easier to trade with other members

More sales mean more products need to be made, so companies buy the raw materials for their product in greater quantities, saving money - making more profit

Question 34

What is a Comparative Advantage (from Trade Blocs)

Answer 34

Countries can concentrate on developing specific industries

being in a trade bloc means its easier to trade for all the different goods and services a country needs, as trade is less restricted

So countries can specialise in producing things they’re good at making and trade for the things they can’t make

Production will increase in each member country because they’re concentrating on what they do best, increasing production in the trade bloc as a whole

Question 35

if you had to evaluate the role of technology on globalisation give 5 points

Answer 35

Joined the world as one single global system - railways and telegraph

Container vessels and networks crucial for China to emerge as ‘workshop of the world’

Migration - 250 million people living in countries they were not born in - remittance flows = $500 billion annually

Migrants implementing own culture - mosques and shrines

The spread of information - 15 zettabytes of data transferred through global trade systems

Question 36

When was the golden era of globalisation

Answer 36

last few decades