Flashcards in 4.1 globalisationn Deck (19)
trade opportunities for international business:
- increased FDI
- opportunity for exporting to developing countries
- better infrastructure, developing countries becoming more production locations
indicators of growth:
- real GDP
- GDP per capita
- comparing currencies
measures of health:
- life expectancy
- infant mortality
- access to clean water
- doctors per 100,000
- life expectancy
- mean years of schooling
GNI per capita
what is foreign direct investment?
is it risky?
- involves direct investment into a country
- more risk than exporting/importing, allows a firm to access comparative/competitive advantage
reasons for FDI:
- investment in expanding industry and fast growing, profitable business
- access to infrastructure
- access to local knowledge/skills
- access to foreign brands
- access to local resources
what is globalisation?
- the increasing integration and cooperation between countries and the growth of international trade
key factors of globalisation:
- multicultural society
- flow of capital between countries
- economic inter-dependency between countries
- goods and services traded throughout the world
- interchange of technology
what is protectionism?
- involves protecting domestic business and home industries against foreign competition and limiting the number of imports on the country
benefits of free trade:
- provides growth opportunities
- allows businesses to access components, raw materials and finished goods far cheaper
what are examples of protectionism in practice?
- technical barriers
what are tariffs?
- tax on imports that increase the price of imported goods
what are subsidies?
- government grants given to support exporting business to they can lower their prices to compete internationally
what is a quota?
- physical limits set on the number of units that can be imported into a country
what is a technical barrier?
- e.g. rules and regulations governing the standard of products entering the country
what is a trading bloc?
- partnerships and agreements between nations to allow free trade and the collaboration and integration of economic, political and cultural practices
what are examples of trading blocs?
- NAFTA (north american free trade agreement)
- ASEAN (association of southwest asian nations)
benefits of trading blocs?
- opportunity to expand into new markets
- benefit from comparative advantage
- easier to source labour if free movement is permitted
- aligns international legislation making markets more efficient