Globalisation - PowerPoint PPT Presentation

About This Presentation
Title:

Globalisation

Description:

Globalisation The growing interdependence of countries and the changes associated with it. Growing international division of labour Growth of trading blocs – PowerPoint PPT presentation

Number of Views:165
Avg rating:3.0/5.0
Slides: 7
Provided by: Zoe105
Category:

less

Transcript and Presenter's Notes

Title: Globalisation


1
Globalisation
  • The growing interdependence of countries and the
    changes associated with it.
  • Growing international division of labour
  • Growth of trading blocs
  • Development of international transport movement
    of goods people (consumers workers) around
    the world
  • Improvements in IT allowing rapid communication
    of info ideas
  • Increasing role of multinational companies (MNCs)

2
Two Schools of Thought
  • Adam Smith (The Wealth of Nations 1776) wealth
    depends on the extent of markets, matching higher
    efficiency with increased customers, and the
    search for customers drives firms from national
    to international markets
  • Karl Marx (Communist Manifesto 1848)
    globalisation involves differentiation of people
    and countries, as well as rapid change and
    sweeping away of traditions all that is solid
    melts into air under the forces of capitalism

3
Growing Economic Interdependence of Countries
  • Rapid Capital Mobility speculative hot money
    flows very quickly between countries
  • Multinational Investment investors are quick to
    move where the action is countries have to
    compete to attract foreign direct investment
  • Reductions in Protectionism
  • Communication Technology

4
Key Characteristics of MNCs
  • Networking between companies hubs of network
    of satellite companies tends to be based in US,
    EU, or Japan
  • Decentralisation of production many MNCs
    produce very close to final market (? transport
    costs respond to local tastes, etc)
  • Concentration the top 500 MNCs are responsible
    for 90 of the worlds foreign direct investments
  • wild geese MNCs tend to base their location
    on subsidies, govt investives, etc. when these
    run out, they move somewhere else

5
Impact of MNCs on Developed Countries
  • ? investment may be of particular benefit to
    previously undeveloped regions
  • ? tax revenues
  • Incentives for countries to make supply-side
    improvements to attract FDI
  • ? capital acct in short-run (longer run ?
    current acct)
  • MNC may bring management expertise technology
    with spill over effects
  • May bring instability if economy becomes largely
    influenced by movement of FDI and MNCs

6
Impact of MNCs on Developing Countries
  • To be explored through studies in development
    economics
Write a Comment
User Comments (0)
About PowerShow.com