Economic Globalization

Economic Globalization

1. increase interdependence

   • countries
     • economic development
   • MNCs
     • business development

2. Features

   • globalized product market
     • origin of production
       • usually less developed countries
       • or emerging countries (e.g. India)
     • products can be brought worldwide (e.g. retails stores)
   • international division of labour
     • headquarters: MDCs
       • :( less job opportunities in manfacturing
         • factories are moved to LDCs
           • :) reduce production cost
             • because rent and wages in LDCs are cheaper
     • factories: LDCs/emerging countries
       • :) more job opportunities in manfacturing
       • :) more experiences
       • :( exploitation of workers
         • no well defined policies
         • Countries set lower limits to attract investors
   • more MNCs

3. impacts

   • local business (local brand)
     • - competition
     • + motivated to improve (good business pratice)
   • LDCs
     • workers
       • + more job opportunities in manufacturing
       • - exploitation
     • LDC government
       • + unemployment decreases
       • - exploitation of workers
         • workers feel unsatisfied
           • social unrest
   • MDCs
     • workers
       • - less job opportunities in manufacturing
     • MDC government
       • - solve social problem of unemployment of labours
   • customers (mainly from MDCs)
     • + more diversity of products
       • better material life
   • MNCs
     • + more profits