GLOBALIZATION
the process by which markets become integrated among nations
economic concepts
impact
impact on growth of domestic businesses
negatives
Dani Rodrik
increased competition
foreign businesses can force domestic producers to become more efficient as domestic consumer has more choice = lower cost goods and services
greater brand awareness
domestc producers have to compete with big names so must create USP
skill transfer
multintional firms will learn from workers hired in particular countries, while workers can learn and develop new skills
closer collaboration
joint ventures, franchises, strategic alliances, etc can create new business opportunities
urbanization
inequality: rich get richer, poorer don't benefit
competition
tax evasion
abuse of weaker nations by more powerful nations
homogenization of national culture
Turkish economist
argues that globalization has caused paradox - caused things like Trump, Brexit etc
significant impact on businesses' growth and evolution
world's regional economies are becoming one integrated global unit
characterized by relatively small number of extremely large 'post-national' businesses
specialization in productive activity
trade
absolute advantage: producing food at lower absolute cost or per unit cost
comparative advantage: country can produce good at lower opportunity cost than trading partner can
free trade: limited barriers
protectionism: trade barriers that exist so country can preserve certain aspect of cultural identity