What is globalization?
3.1a
Globalisation is the increasing interconectiveness and interdepence of countries worldwide through the increase in the volume and variety of cross boarder transactions and flows
what are the four main aspects of globalisation?
3.1a
Economic, Political, Social and cultural
What is involved in economic globalisation?
what is involved in political globalisation
what is involved in social globalisation
3.1a
what is involved in cultural globalisation
3.1a
How much Turnover occurred per day in the foreign exchange markets in 2022? (flows of capital)
7.5 trillion
what proportion of global GDP in 2019 was generated by the flows of industrial and agricultural products
1/3
What developments in transport occurred in the 19th and 20th century and how did this contribute to globalisation?
3.1b
Why is transportation important in the contributuion to globalisation?
transportation is the medium in which material flows can occure
what effect has developments in transport lead to?
3.1b
the shrinking world effect - while the physical distances of places remain unchanged, the reduction in transportation time makes them feel closer.
Why were developments in ICT in the 20th and 21st century important?
3.
While transportation has allowed for the mass movement of goods, ICt and communication allows for the flows of immaterial goods, and leads to greater intergration wordwide. The reason transportation has allowed for global intergration is because buisnesses have been able to communicate globally
What developments in ICT occurred in the 20th and 21th century?
How have IGOs contributed to the growth of Globalisation?
Globalisation is not an automatic result of the advancement of technology - global flows can only (and have only) take place if economic liberalisation is embraced by national governments.
How has the IMF contributed to globalisation?
How has the wolrd bank contributed to globalisation?
how has the WTO contributed to globalisation?
What are the ways in which national governments can contribute to globalisation?
Joining trade blocs and through policy
* A trade bloc is an agreement within a group of countries in which all barriers to trade are removed. The EU is a single market of 28 countries, and promises the free movement of goods, capital and people. The original objective was to prevent war through the economies becoming so well connected.that it prevents war. In 2015, the EU and Vietnam removed protectionist measures between them.
* market liberalisation - popularised by Thatcher and Reagen in the 80’s, they believed goverment restrictions hindered economic growth and so removed restrictions on the market, allowing for inward investment especally from the banking sector, making London a global financial asset
* privatisation - E.g British airways - Qatar owns 25%. Ownership of stocks has often gone overseas, encouraging the flows of capital
What is FDI?
Investment from one party in a country to a project, company or other party in a foreign country.
What was China’s open door policy?
In 1978, the new CCP leader, Deng Xiaoping adopted the open door policey, allowing TNC’s to invest in China. This created 7 main Special Economic zones, where traditional communist rules did not apply and where western companies could take advantage of minimal tax, cheap labour and little enviromental regulation.
Has the pattern in FDI stayed the same?
No - BRICS countries are increasingly investing in other parts of the world. they represent 19% of FDI outward investment.
What is the KOF index?
3.3a
An annual ranking produced by the Swiss Institute for Business Cycle Research, it is a composite index which includes 24 indicators spread over three catogries : Political (39% weighting), economic (37%) and social (24%) globalisation. Switzerland is the most globalized country (2023)
What is the AT Tearney Index?
includes political engagement, technological connectivity, personal contact and economic integration.
It is considered more holistic than the KOF index because it looks at the number of web servers rather than just internet communications, for example.
How have TNCs contributed to the spread of globalisation?
TNCs can be referred to as the ‘architects of globalisation’. They build bridges between different countries and markets.
-TNCs, in order to remain productively efficient in a country, make significant investment in the form of FDI. This economically develops the recipient country, developing their markets and exacerbating increases in globalisation. In 2020, global FDI flows reached 1 trillion dollars.
- TNCs create a complex global supply chain network, which connects producers and encourages flows of goods. iPhones are designed in the USA, the chips are made in China, the screen in South Korea and are assembled in China. This creates a mutual economic interdependence through the fostering of international trade.
-The world bank estimates 80% of global trade involves TNCs
-TNCs cause global diffusion as the products they sell often represent the culture and customs of their host country - Coca Cola is accessible to Amazonian tribes. In addition, TNCs often adopt globalisation - adapting a good to match local cultures or preferences, like McDonald’s selling big Mac’s without cheese in Israel to make them Kosher. This leads to a blending of cultures