Globalisation

Question 1

Concept of ‘Global Village’

Answer 1

Organisations acting in an increasingly global Manne

1. Thinking globally
2. Acting Globally
3. Making Planet wide decisions

Question 2

Concept of ‘World Economy’

Answer 2

Facilitated by international trade. Trade of goods affected by global events (e.g. financial crisis 08/09)

Question 3

Globalisation

Answer 3

1. A process by which international economies, societies and cultures have become increasingly integrated
2. As a result of a global network of trade, communication transport and immigration

Question 4

Capital Flows

Answer 4

Flow of money for the purpose of investment, trade or to produce goods and provide services.
Usually into a production operation.

Question 5

International Trade

Answer 5

Trade of goods and services across international borders

1. G/S into a country= Imports
2. G/S out of a country= Exports

Question 6

Labour

Answer 6

Factor of production.

The human physical and mental input into production of goods and services.

Question 7

Globalisation and International Trade

Answer 7

Roots of Globalisation

Increasingly accessible markets opens up wider global community.

Question 8

Factors of Production

Answer 8

Productive resources that are combined to produce goods and services

1. Land
2. Labour
3. Capital
4. Enterprise

Question 9

What facilitated rapid growth in international flows of capital?

Answer 9

Deregulation of the world financial markets in the late 20th century.

Question 10

Frank-Wallerstien Core Periphery Model

Answer 10

Assumed that:

1. Global power concentrated among relatively small block of states- CORE regions.
2. PERIPHERY- less developed countries who have been exploited; suffering from a lack of investment, leakages and outward migration

Question 11

Frank-Wallerstien Core Periphery Model Limitations

Answer 11

Model outdated- rapid growth of emerging economies (middle-income countries) e.g. BRIC and MINT (more recent)

Question 12

BRIC

Answer 12

Brazil
Russia
India
China 
Economies have advanced rapidly since the early 1990's

Question 13

MINT

Answer 13

Mexico
Indonesia 
Nigeria 
Turkey 
Economies have advanced more recently

Question 14

Leakages

Answer 14

Loss of income in an economic system e.g. profit repatriation where TNC’s send their profits back to their base country

Question 15

FDI

Answer 15

Investment by TNC’s (and sometimes governments) based in one country into a foreign enterprise.

1. Setting up subsidiary company
2. Buying shares
3. Merger
4. Joint venture

Question 16

Repartriation of Profits

Answer 16

TNC’s will send back profit to their country of origin e.g. sending profits made by production in developing countries to HQ in developed countries

Question 17

Aid

Answer 17

Importance source of financial support for developing countries

1. Multilateral- Through organisations such as the UN e.g. ODA; contributions made by richer countries
2. Bilateral- From one government to another
3. Through NGO’s e.g. disaster relief

Question 18

Migration

Answer 18

Majority of migration from developing to developed country. Damaging to a developing country:
1. Loss of skilled workforce preventing future economic growth
2. Loss of income tax preventing governments spending on infrastructure such as education and healthcare that promotes growth
Promoted and increased through globalisation

Question 19

Remittance Payments

Answer 19

1. Transfer of income from migrant worker to home country

2. Increasingly important source of income for developing countries as migration increases

Question 20

Globalisation and Flows of Labour

Answer 20

Labour market not as free flowing as financial markets- restrictions on immigration……….
…….Despite this migration has increased significantly in the last 20/30 years as a result of globalisation.

Question 21

Key Facts - Flows of Labour

Answer 21

1. Majority of migrant move short distances
2. North America and Europe attract migrants from furthest afield
3. Bulk of economic migrants have some financial means and education
4. Aisa= largest regional flow of labour

Question 22

Increasing Flows of Products

Answer 22

Facilitated by reduction in trade costs:

1. Transaction-Reduced through improvements in the flow of data
2. Tariff- tariffs have generally fallen as a result of organisation such as WTO promoting international trade
3. Transport- containerisation led to a unified system of transporting goods. enabled complex long distance flow of products.
4. Time- (transportation improved)
   * ***costs have all fallen increasing international trade and by extension the flow of products.

Question 23

Government Limits to the Flow of Products

Answer 23

PROTECTIONISM- Deliberate policies by governments with the aim of restricting imports into a country

1. e.g. raising tariffs
2. usually done to protect domestic producers from foreign competitors

Question 24

Flow of Services (high level services)

Answer 24

Flow of services= economic activities without the trade in goods
High level services- services to businesses e.g. finance investment. Increasingly based in major cities of developed countries e.g. London, Tokyo
*East Asian economies have recently become major centre of high level services

Question 25

Flow of Services (low level services)

Answer 25

Flow of services= economic activities without the trade in goods Low level services- services to customers e.g. travel tourism etc * recent trend of decentralisation of low level services from developed countries to the developing world e.g. call centres moved from the UK to India where labour cost are 10-20%

Question 26

Footloose

Answer 26

Means that a business can locate anywhere- advancing technology means that businesses providing a service can locate anywhere on the globe whilst still meeting the needs of their international customers

Question 27

Conglomerates

Answer 27

A collection of different companies that report to a parent company. * Most TNC's are conglomerates e.g. HSBC Holdings, TUI group ....

Question 28

Flow of Information

Answer 28

Spread of ideas, knowledge and culture...... The result of increasing: 1. Movement of people though migration 2. Speed of data and communication transfers * The internet, improved telecommunications and live media coverage have transformed the way in which information flows

Question 29

Global Marketing

Answer 29

Develop a brand and deploy marketing strategy to advertise the product globally * can generate EOS as the scale of production/ output increases

Question 30

Division of Labour

Answer 30

Globalisation has lead to an international division of labour 1. High skilled, highly paid occupations which on a global scale are largely concentrated in more developed countries 2. Unskilled, poorly paid occupations which tend to be located in developing countries where labour costs are lower * too simple..... given the rise of NIC's in the global economy within the last 40 years

Question 31

Developments in NICs (Tiger, BRIC, MINT)

Answer 31

(Chronological Order) 1. Asian 'Tiger' economies- Hong Kong, Singapore, South Korea, Taiwan. 2. BRIC economies- Brazil, Russia, India, China. 3. MINT economies- Mexico, Indonesia, Nigeria, Turkey

Question 32

1954 Production

Answer 32

95% of production concentrated in industrialised countries of Western Europe, North America and Japan. * Products largely consumed in country of origin.

Question 33

Deindustrialisation and Global Shift of Production

Answer 33

50% of manufacturing is based in the developing world Overtime deindustrialization of developed countries has occurred. 1. Lower labour costs 2. limited environmental regulation 3. incentives by governments in developing countries (e.g. tax breaks) *TNC's increasingly moving production to developing countries.