Globalization Flashcards
1
Q
Explain the reasons for this second wave of globalization, and its major characteristics up to around 2015
A
- Faster transformation of the economy.
- New growth forces being created in the 1970s.
- GPT: the microchip.
- Increased global competition.
- NIC’s = new emerging markets. (Asia).
- Either try to compete with Asia’s cheap labor or invest in it and focus on other businesses.
- High growth.
- Pressure to de-regulate global capital markets from 1970s.
- FDI’s increased rapidly.
- Deregulation race. Abolishment of capital controls, and deregulations of the stock exchange.
- Vast growth of MNEs from 70s till 90s.
- Post-war interventionist policies are being phased out.
- Neoliberal political regimes took over in the 1980s.
- Steep decline of transport and communication costs.
2
Q
Explain the reasons for this second wave of globalization
A
Trade of industrial products increases.
Shift of trade centers from GBR, US, towards East and Southeast Asia.
China’s share in international trade increases sharply to become the largest exporter in the 2010s.
China opened up its economy to global companies in 1979, joins WTO 2001.
The soviet communist bloc is falling apart.
The Fall of the Wall 1991.
Global firms created international production systems by placing parts of their production in different parts of the world (integration of value chains).
Asian and Latin American firms also pursued FDIs.
