BUS201 Lecture Notes - Lecture 1: World Trade Organization, International Monetary Fund, Foreign Direct Investment
Document Summary
The political economy of international trade 12. Globalization refers to the shift toward a more integrated and interdependent world economy. Globalization of production: sourcing goods & services from locations around the globe to take advantage of national differences in the cost and quality of factors of products: companies can, lower their overall cost structure. Improve the quality or functionality of their product offering. Drivers of globalization: decline in trade and investment barriers, fdi: when a firm invests resources in business activities outside home country, lowering of tariffs to 4, technological change, microprocessors and telecommunication, transportation technology. Implications for firms: lower barriers greater market base & more locations for production, lower transportation costs firms can disperse production, lower information processing & communication costs. Changing demographics of global economy: changing world output & world trade, 1960: usa = 40% of world economic activity.