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28 Cards in this Set
- Front
- Back
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Define Globalisation |
Anything that facilitates expanded economicinteraction between countries. Anything that lowers the cost of internationaltransactions (Ozforex) Includes goods, services, factors of productionand financial assets |
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Key forms of globalisation |
Rise in trade flows Convergence of international pricing FDI Foreign portfolio investment Migrant labour Immigration Offshoring (Including outsourcing) |
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Define Outsourcing |
Outsourcing occurs when a company contracts a specificprocess out to a third party who has specialised knowledge. |
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Define Offshoring |
Offshoring occurs when a business sends in house jobsoverseas. |
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When were the two waves of Globalisation? |
- 1820’s and 1970’sp |
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What were 3 factors that led to globalisation in the 1820's |
Development of the steamship- Transatlantic cable Developments in the Suez Canal |
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What are 3 pieces of evidence that globalisation took place in the 1820's? |
O’rourke and Williamson Falling shipping costs Convergence of product prices (Pepper, cloves,coffee) |
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What is the main driver for Globalisation in the 20th Century? |
Gatt/wto multilateral reductions in tradebarriers. |
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What is the General Agreement on Tariffs and Trade mission? |
Substantial reduction in tariffs and other trade barriersand the elimination of preferences, on a reciprocal and mutually advantageousbasis. |
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Define Liberalisation |
any reduction in barriers to international transactionscreated by governments. |
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What was Hummel's (2007) findings in regards to logistics? |
Containerisation in the 1970’s has notdramatically reduced shipping costs. Most of the costs in shipping are in fuel. Air freight costs have reduced costssignificantly due to the development of the jet engine. |
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What is evidence for increased globalisation in the 20th Century? |
Rising trade flows Rising Rising share of foreign born labour force. |
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What is the open formula? |
(Exports + Imports / GDP) *100 |
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Summarise the two waves of Globalisation |
First big globalisation in 1820’s due totechnology Second big globalisation in late 20thcentury due to policy |
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What are some key factors to the future of international trade? |
Global warming Resurgence of protectionist policy Volatile trade Peak Oil |
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What are some reasons that countries trade? |
Differences between countries Increasing returns to scale Imperfect competition |
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Name some key differences between countries |
Climate, consumer preferences, natural resources, factorproportions, culture. |
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What is meant by "Increasing Return to Scale"? |
For manufactured goods there are returns to scale of havingall of one type of good manufactured at one place in the world. E.g. Racingbikes are all made in Taiwan. |
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Define imports |
Purchase of goods and services from another country. |
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Define Exports |
Sale of goods and services to another country. |
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Define Migration |
The flow of people across boarders as they move from countryto country |
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Define Foreign Direct Investment |
The flow of capital across boarders when a company owns atleast 10% (According to OECD Definition) in another country. |
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What is Horizontal FDI? |
When a company from an industrial country invests in anotherindustrial country. |
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What is Vertical FDI? |
When a company from an industrial country invests in acompany from a developing country, largely due to lower labour costs. |
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Define TradeBalance |
Total value of exports – Imports |
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BilateralTrade Balance |
Total value of exports – Imports for 2 particular countries. |
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What are some key barriers to trade? |
Tariffs and Quotas Transport costs Other things such as wars |
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Where does the majority of FDI Occur? |
Between Industrialised countries |
