Chapter 20 | Globalization, Interdependence, and Sustainability

Comparative advantage

Comparative advantage

The relative cost advantage a country or organization has to produce certain goods or services for trade

Complementarity

The mutual trade relationship that exists between two places based on the supply of raw material and the demand for finished products or services

Neoliberalism

Beliefs that favor free-market capitalism in which trade has no constraints from government

Deindustrialization

Process by which a country or area reduces industrial activity, particularly in heavy industry and manufacturing

Growth pole

A place of economic activity clustered around one or more high-growth industries that stimulate economic gain by capitalizing on some special asset

Just-in-time delivery

A system in which goods are delivered as needed so that companies keep in inventory only what is needed for near-term production

Fordism

A highly organized and specialized system for industrial production that focuses on efficiency and productivity in mass production; named after Henry Ford

Post-Fordism

System focused on small-scale batch production for a specialized market and flexibility that allows for a quick response to changes in the market

Offshore outsourcing

The process by which services or one or more aspects of production are moved to an organization in another country

International division of labor

A pattern of production and labor in which different countries are engaged in distinct aspects of production

Multiplier effect

The economic effect in which a change creates a larger change, such as when a new manufacturing plant grows the economy by giving rise to more related jobs and services

Special economic zone (SEZ)

An area within a country that offers more favorable economic regulations (such as tax benefits or no tariffs) to attract foreign businesses

Export processing zone (EPZs)

An area within a country that is subject to more favorable regulations (usually including the elimination of tariffs) to encourage foreign investment and the manufacturing of goods for export

Free trade zone (FTZs)

A relatively large geographic area within a country in which businesses pay few or no tariffs on goods to encourage or facilitate its role in international trade

Ecotourism

A form of tourism based on the enjoyment of natural areas that minimizes the impact to the environment