Theme 4: Globalisation Flashcards
Globalisation
Increased integration of economies around the world.
Foreign Direct Investment
An investment made by a firm in one country into a firm in another country, to gain control over the foreign firm.
Transnational Corporation
transnational corporation is a company that operates in two or more countries.
5 Characteristics of Globalisation
- An increase in international movement of labour
- An increase in international movement of financial capital
- An increase in specialisation
- An increase in international trade
- An increase in trade-to-GDP ratios.
Containerisation
An efficient and relatively low cost system of transport that uses a common size of steel container to transport goods.
Tariff
A tax on imported goods
Causes of Globalisation
- Improvements in transport
- Improvements in IT
- Containerisation
- Trade liberalisation
Transfer pricing
A method of pricing goods and services transferred within TNCs in order to reduce the amount of corporation tax paid.
Impact of Globalisation on Individual Countries
Globalisation has led to an increase in living standards but also an increase in overdependence.
Impact of Globalisation on Governments
Globalisation has led to an increase in tax revenue but also an increase in transfer pricing.
Impact of Globalisation on Producers?
Globalisation has reduced costs through relocation but it has also increased barriers to entry.
Impact of Globalisation on Consumers
Globalisation has led to an increase consumer choice and lower prices but it has arguably reduced happiness.
Impact of Globalisation on Workers
Globalisation has led to an increase in international job opportunities but increased structural unemployment.
Impact of Globalisation on the Environment
Globalisation has increased international cooperation to fight climate change but it has increased global warming.
