Global Biz and Society

Globalization

Process by which the exchange of: goods, services, capital, technology, and knowledge - across international borders becomes increasingly interconnected.

Globalization is a process that leads to:

compression of time and space + higher speed and proximity of interactions

Political Globalization:

Increased political cooperation at a global level

Economic Globalization:

Free trade equals positive and negative effects

Cultural Globalization:

Different languages, religions, and tradition. Also World Culture.

Ad Valorem Tariffs: Effect on Price:

Consumers turn towards a domestic item --> Domestic Price Increases

Ad Valorem Tariffs: Effect on Production:

Production Increases --> This is called the Protective Effect

Ad Valorem Tariffs: Effect on Consumption:

Consumption Decreases --> This is called the Consumption Effect

Ad Valorem Tariffs: Effect on Imports:

Imports Decrease

Export Taxes: Effect on Price:

Producers turn towards the Domestic Market --> Domestic Price Decreases

Export Taxes: Effect on Exports:

Exports Decrease

Export Taxes: Effect on Production:

Production Decreases

Export Taxes: Effect on Consumption:

Consumption Increases

African Startup Costs

Quite High Costs: many procedures involved, registration cost, licenses cost, must improve institutional and economic governance --> digitalization of processes to create a business

African Electricity Access

Quite High costs: daunting procedures, frequent outages. Only 5% of people have access in the Sub-Saharan region. Consumption of energy in the sub-region is below 17% (global average). Must encourage the production+consumption of green energy. Must discourage the consumption of fossil fuels.

African Finance Access

Low degree of affordability, physical access, and information symmetry between lenders and borrowers --> adaverse selection and moral hazard. Must introduce info sharing offices or credit reporting agencies.

African Trade Integration

High Taxes and Low Cross-Border Trade. All fiscal systems in Africa apply high taxes to capital flows leaving the country. Limited economic integration and poor infrastructure.

African Trade Integration Details

Problems regarding diversity of products BUT if products are homogenous --> less incenstive to trade, unless high prices + poor product quality probs emerge.

African Trade Int - 2018: Continental Free Trade Area (CFTA)

Expected to increase cross-border trade.