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4.1.3 Factors contributing to increased globalisation - Coggle Diagram
4.1.3 Factors contributing to increased globalisation
Trade Liberalisation
An increasing number of countries around the world have opened up their economies, allowing trade to flow without barriers.
Influence of the World Trade Organisation (WTO).
Political Change
1991: Communist rule ended in the Soviet Union.
1991: Berlin wall removed, uniting East & West Germany.
1989: Ceausescu removed from power in Romania.
1976: death of Chairman Mao, China and economic reform began.
Reduced cost of transport and communication
Business travel by aeroplane – less expensive.
Modern technology – complex data can be transferred quickly, workers can choose location.
Internet – ecommerce enables businesses of all sizes to compete globally.
Containerisation
FDI
Cross-border mergers & acquisitions: the main form of FDI.
Horizontal and vertical FDI: (H) producing the same products or services as is done at home. (V) where one firm seeks to acquire materials/supports for its own products or services.
Greenfield FDI: The investing company sets up (builds) new factories or facilities.
Brownfield FDI: The investing company leases or purchases existing production facilities to launch a new production activity.
Migration
The movement of people who aim to set up permanent or temporary residence in a new location.
Focus on knowledge-based industries
Knowledge-based industries: biotechnology, IT, R&D, education, software development, pharmaceuticals, finance, care, aerospace = help improve standard of living for citizens.