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Factors Leading To Globalisation - Global Environment, Business Environment Video Lecture | Business Environment - B Com
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FAQs on Factors Leading To Globalisation - Global Environment, Business Environment Video Lecture - Business Environment - B Com
| 1. What are the factors leading to globalisation? |  |
Ans. Globalisation is influenced by various factors, including the global environment and business environment. These factors include advancements in technology, increased international trade, liberalization of markets, global communication networks, and the growth of multinational corporations. These factors have contributed to the interconnectedness of economies, cultures, and societies worldwide.
| 2. How does the global environment contribute to globalisation? | |
Ans. The global environment plays a crucial role in driving globalisation. Technological advancements, such as the internet and transportation systems, have significantly reduced the barriers to communication and transportation, making it easier for countries to engage in trade and exchange of ideas. Additionally, global environmental challenges, such as climate change and pandemics, require international cooperation and collaboration, further promoting globalisation.
| 3. What role does the business environment play in globalisation? | |
Ans. The business environment plays a significant role in fostering globalisation. Economic liberalization and deregulation policies have created opportunities for businesses to expand their operations across borders. Multinational corporations, with their global reach and influence, have played a crucial role in integrating economies worldwide. Moreover, the increasing competition in the global market has incentivized companies to seek international opportunities for growth and market expansion.
| 4. How has technology contributed to globalisation? | |
Ans. Technology has been a driving force behind globalisation. The internet has revolutionized global communication, allowing people from different countries to connect and share information instantaneously. This has facilitated the growth of international trade and the outsourcing of services. Additionally, advancements in transportation technology, such as faster and more efficient modes of transportation, have made it easier for goods and people to move across borders, further promoting global integration.
| 5. Why are multinational corporations important in globalisation? | |
Ans. Multinational corporations (MNCs) are essential actors in the process of globalisation. They have the ability to operate and invest in multiple countries, contributing to the flow of capital, technology, and knowledge across borders. MNCs create employment opportunities, stimulate economic growth, and transfer skills and technology to host countries. Their global presence and influence also make them key players in shaping international trade policies and fostering global economic integration.
Text Transcript from Video
In this checkpoint, we want to look at
three of the most important reasons for globalisation.
First is a shift in ideology.
In the second half of the twentieth century,
there was a shift to market based economies.
Many large, previously closed economies open
up.
For example, Russia with the fall of the USSR,
and China under which adopted
some
capitalist policies.
So these countries became more business friendly
as the liberalisation of the markets occurred.
And the markets therefore became more contestable.
This facilitated the free flow of capital
and goods
and services across borders.
This is a political reason, but no doubt explains
why post Soviet states in post-Mao China
became significant players in international
trade
and investment.
Hence, resulting in what we call globalisation.
Second the awareness of the gains from trade,
according to the theory of comparative advantage.
So countries are supposed to specialise in
areas of production which they have comparative
advantage in.
So this is based on factor endowment.
For example, China has relatively more abundant
low skilled labour, hence it has comparative
advantage
in labour intensive low skilled manufacturing.
So trading, according to comparative advantage
results in higher world output.
Then there are also the standard benefits
of trade
such as larger markets that allow firms to
enjoy
greater economies of scale due to greater
specialisation of workers, machinery etc.
So when governments understands the benefits
of trade
they then take initiative to forge free trade
relations,
such as free trade agreements, and joining
the
World Trade Organisation etc, or pushing for
economic integration
such as in the case of the European Union,
ASEAN or NAFTA,
which is the Northern American Free Trade
Agreement.
Thirdly, technology has quickened the pace
of globalisation.
There are two forms of technology that are
central here.
One is information technology, where outsourcing
is
made available via teleconferencing.
There are also more transactions and more
ways to trade,
such as online transactions, right, and online
markets.
Perhaps the most important point here is actually
that better IT facilitates rapid information
flow,
resulting in less imperfect information.
So, information technology has resulted
in more tools for us to identify and pursue
economic
opportunities regardless of the international
boundaries.
The other one is transport technology,
especially sea transport, air transport.
There is an increase in the ease and availability
resulting in increased exchange of goods and
services
using these transport technologies.
So better, faster transport has also reduced
the geographical immobility of factors,
specifically of labour,
so it increases the labour flows between economies
three of the most important reasons for globalisation.
First is a shift in ideology.
In the second half of the twentieth century,
there was a shift to market based economies.
Many large, previously closed economies open
up.
For example, Russia with the fall of the USSR,
and China under
some
capitalist policies.
So these countries became more business friendly
as the liberalisation of the markets occurred.
And the markets therefore became more contestable.
This facilitated the free flow of capital
and goods
and services across borders.
This is a political reason, but no doubt explains
why post Soviet states in post-Mao China
became significant players in international
trade
and investment.
Hence, resulting in what we call globalisation.
Second the awareness of the gains from trade,
according to the theory of comparative advantage.
So countries are supposed to specialise in
areas of production which they have comparative
advantage in.
So this is based on factor endowment.
For example, China has relatively more abundant
low skilled labour, hence it has comparative
advantage
in labour intensive low skilled manufacturing.
So trading, according to comparative advantage
results in higher world output.
Then there are also the standard benefits
of trade
such as larger markets that allow firms to
enjoy
greater economies of scale due to greater
specialisation of workers, machinery etc.
So when governments understands the benefits
of trade
they then take initiative to forge free trade
relations,
such as free trade agreements, and joining
the
World Trade Organisation etc, or pushing for
economic integration
such as in the case of the European Union,
ASEAN or NAFTA,
which is the Northern American Free Trade
Agreement.
Thirdly, technology has quickened the pace
of globalisation.
There are two forms of technology that are
central here.
One is information technology, where outsourcing
is
made available via teleconferencing.
There are also more transactions and more
ways to trade,
such as online transactions, right, and online
markets.
Perhaps the most important point here is actually
that better IT facilitates rapid information
flow,
resulting in less imperfect information.
So, information technology has resulted
in more tools for us to identify and pursue
economic
opportunities regardless of the international
boundaries.
The other one is transport technology,
especially sea transport, air transport.
There is an increase in the ease and availability
resulting in increased exchange of goods and
services
using these transport technologies.
So better, faster transport has also reduced
the geographical immobility of factors,
specifically of labour,
so it increases the labour flows between economies
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Dec 19, 2024 Last updated |
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