Growing Economies Flashcards
Define Globalisation
The process that enables markets to operate internationally. It requires the free movement of products resources and finance so that businesses can sell in a world wide market.
Define PESTEL
Political Economical Social Technological Environmental Legal
When would you use PESTEL?
When assesing external factors of a business
Define economy
The trade of goods and services in a country
Define emerging economy
When a country which isn’t wealthy has an economy which is still developing
What are the BRICS countries?
Brazil Russia India China South Africa
What are the MINT countries?
Mexico
Indonesia
Nigeria
Turkey
What is the formula for economic growth?
Change in GDP
—
Name the indicators of economic growth?
Trade opportunities for businesses
Employment patterns
Why are trade opportunities for businesses seen as econ growth?
When there is a trade opportunity businesses can move into that sector as it is profitable
What are some changes in employment patterns?
More women in work
More migration
More home working
Sector change e.g. primary to secondary
What are some indicators of growth?
GDP
GDP Per Capita
GDP Per Capita at PPP
HDI
Define GDP
Gross Domestic Product: The total value of goods and services produced in an economy in 1 year
What is GDP Per Capita?
The GDP divided by the population. GDP per head
What is GDP Per Capita at PPP?
Purchasing power parity: A measure of real growth that uses the price of purchasing a standardised basket of goods and services in order to compare prices around economies.
Define first mover advantage
Invention, when you come up with a concept first
Define international trade
The exchange of capital, goods and services across international borders.
Exporting and Importing
Define export
A good produced here then consumed overseas
Define import
A good produced overseas then consumed here
Define specilization
Being able to perform a specific job/task at a high level
Define comparitive advantage
An economies ability to produce goods/services at a lower opportunity cost than their trade partners. International
Define competitive advantage
A firms ability to produce a good/service at a lower cost than its competitors
What are some benefits of specilisation?
Increases productivity
Improves efficiency
Jobs become easier
Sustain comparitive advantage
What are some drawbacks of specilization?
Limits focus to only one task Limits output as it takes longer Requires training which is expensive Limits innovation Inability to be dynamic
Define FDI
Foreign Direct Investment- When an investor from another country invests into a business which they gain (an amount) of control over
Define Inward cross border investment
Recieving investment from overseas
Define outward cross border investment
Build or buy facilities overseas
Define greenfield cross border investment
Vertical- Build a completely new business overseas
Define brownfield cross border investment
Horizontal- Buy an existing business/purchase or lease facilities. E.G. EE took over T Mobile
What are benefits of Greenfield?
100% ownership
Economies of scale
Creates jobs
What are some disadvantages of greenfield investment?
High risk
High costs
Govt regulations
What are some advantages of brownfield investment?
Less risk as already established business
Eliminate competition
Less start up costs
What are some disadvantages of brownfield investment?
Facility or infrastructure may need upgrading
Locational constraints
FDI benefits for the host country
Brings new jobs Brings new tech Increases exports Better infrastructure More tax revenue
Define Tariff
Adding a tax to a good that has been imported
Define import quota
A restriction to the amount of goods that can be imported
