Globalisation

2.2.1 Globalisation a) Definition of globalisation: increased integration and interdependence of economies. b) Reasons for globalisation: • fewer tariffs and quotas • reduced cost of transport • reduced cost of communication • increased significance of multinational corporations (MNCs). c) Impacts of globalisation and global companies on individual countries, governments, producers and consumers, workers and the environment: • rising living standards • greater choice • lower prices • reduced costs of communication • closing of traditional industries • environmental impact. d) Definition of multinational corporations (MNCs): • definition of foreign direct investment (FDI) • reasons for emergence of MNCs/FDI: o to benefit from economies of scale o to access natural resources/cheap materials o lower transport and communication costs o to access customers in different regions. • advantages and disadvantages of MNCs/ FDI: o creating jobs o investing in infrastructure o developing skills o developing capital o contributing to taxes o avoiding paying taxes o environmental damage o moving profits abroad.