Economic Globalization and Its Consequences

These flashcards cover key terms and concepts related to economic globalization, including definitions, implications, and drivers.

Globalization

The process by which nationality and geographic location become increasingly irrelevant for economic activities.

Economic Globalization

The process advancing the integration of the world economy through trade and investment.

Cultural Globalization

The process by which tastes and preferences become more similar across countries.

Political Globalization

Countries care about their neighbours’ actions due to negative spillover effects.

Globalization of Consumption

The independence of the nation in which a product was made from the nationality of the consumer.

Globalization of Production and Ownership

The nationality of the owner and controller of productive assets is independent of the nation housing them.

Comparative Advantage

The ability of a country to produce goods at a lower opportunity cost than another country.

Multinational Enterprises (MNEs)

Companies that own or control production or service facilities in one or more countries other than their home country.

Trade Barriers

Government-imposed restrictions on the free exchange of goods and services between nations.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country.

The Westphalian Principle

The principle that states may operate freely within their own borders without external interference.

Stagnation of Low-skilled Wages

The phenomenon where wages for jobs requiring low skills are not increasing, despite other wage growth.

Skill-biased Technological Change

Technological change that increases the productivity of skilled labor compared to that of unskilled labor.

Consumer Recognition Advantage

The advantage gained by a brand due to its recognition and positive reputation among consumers.

Negative Spillover Effects

Consequences of actions taken in one country that affect individuals or communities in another country negatively.