Globalisation

Globalisation

1. Characteristics of globalisation

   • Trade to GDP ratios are increasing for most countries
   • Expansion of financial capital flows between countries
   • FDI and Cross Border M&A
   • Rising number of global brands - including from emerging countries
   • Deeper specialisation of labour
   • Global supply chains
   • Increasing levels of international labour migration
   • Increasing connectivity

2. Drivers of globalisation

   • Containerization
   • Technological change
   • Economies of scale
   • Less protectionism

3. Gains from globalisation

   • Benefits from deeper division of labour
   • Reduce monopoly power
   • higher per capita incomes
   • Free movement of labour
   • Dynamic efficiency
   • Capital market allows savings gap to be overcome
   • Increased awareness
   • Competitive pressures causing better governance

4. Disadvantages from trade

   • Rising inequality
   • Threats to the global commons
   • Macroeconomic fragility
   • Trade imbalances
   • Structural unemployment
   • Dominant global brands (world monopoly)
   • Poor behaviour from MNCS