Cause + Effect Globalisation

• What is globalisation?

  Integration of local, regional, and national economies
• What does globalisation involve?

  Free trade, movement of capital and labour
• How has globalisation affected trade between nations?

  Increased trade and capital transfers
• What is FDI?

  Foreign direct investment
• How have brands developed due to globalisation?

  Brands have become global in reach
• What has increased due to globalisation in terms of labour?

  More migration and divided labour among countries
• Which countries have increased participation in global trade?

  China and India
• What does increased interdependence among countries mean?

  Countries rely on each other's performance
• What event illustrated global interdependence in 2008 and 2009?

  The global credit crunch
• What are the factors contributing to globalisation in the last 40 years?

  • Trade in goods
  • Trade in services
  • Trade liberalisation
  • Multinational Corporations (MNCs)
  • International financial flows
  • Communications and IT
  • Containerisation
• How have developing countries contributed to trade in goods?

  They acquired capital and knowledge for manufacturing
• What has made it easier to transfer goods internationally?

  Efficient forms of transport
• Why do MNCs move production to developing countries?

  Cost advantage of cheaper labour
• What has increased in trade services from developing to developed countries?

  Tourism, call centre services, software production
• What role does the WTO play in globalisation?

  Advocates for free trade and reduces barriers
• What are MNCs?

  Organisations controlling production in multiple countries
• How do MNCs benefit from economies of scale?

  By reducing costs through larger production
• What has increased due to international financial flows?

  Capital and FDI across borders
• What has facilitated the increase in international financial flows?

  Removal of capital controls
• How has IT impacted globalisation?

  Made communication easier and cheaper
• What does 'death of distance' refer to?

  Increased interconnectedness due to IT
• What is containerisation?

  Shipping goods in standard sized containers
• How has containerisation affected shipping costs?

  Made it cheaper to ship goods globally
• What are the benefits of containerisation for MNCs?

  Exploiting economies of scale and faster cargo movement
• What is a potential downside of containerisation?

  Could result in structural unemployment
• What are the advantages of containerisation?

  • Cheaper shipping costs
  • Faster cargo movement
  • Easier loading and distribution
  • Exploitation of economies of scale
• What are the implications of globalisation for countries?

  • Increased interdependence
  • Greater participation in global trade
  • Potential for structural unemployment
  • Enhanced competition in markets
• What can result from globalisation between countries?

  Trade imbalances
• What inequalities can arise from globalisation?

  Access to health, education, and markets
• How does globalisation affect income and wealth within countries?

  It can create income and wealth inequalities
• How can culture be affected by globalisation?

  It can spread globally, affecting diversity
• What are the two perspectives on cultural spread due to globalisation?

  Weakening culture vs. improving quality of life
• How might governments be impacted by globalisation?

  They may lose sovereignty due to treaties
• What challenges do individual states face with international treaties?

  Difficulty resisting the force of treaties
• What benefits do consumers and producers gain from globalisation?

  Specialisation and economies of scale
• How does competition affect firms in a globalised market?

  Encourages lower average costs and efficiency
• How can producers lower their average costs?

  By switching production to cheaper labor locations
• What has the spread of technology allowed firms to do?

  Employ advanced machines and production methods
• What overall effect does globalisation have on world GDP?

  It generally increases world GDP
• How does globalisation affect consumer living standards?

  It increases living standards and reduces poverty