Podcast
Questions and Answers
What is one of the benefits of globalization to firms?
What is one of the benefits of globalization to firms?
What is a consequence of global companies creating jobs?
What is a consequence of global companies creating jobs?
What is an example of a global company's investment leading to economic growth?
What is an example of a global company's investment leading to economic growth?
How much corporation tax did the government make in 2019 from overseas firms?
How much corporation tax did the government make in 2019 from overseas firms?
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What is a benefit of global companies having the resources for research and development?
What is a benefit of global companies having the resources for research and development?
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What is a negative impact of multinational companies on the environment?
What is a negative impact of multinational companies on the environment?
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Why might multinational companies manufacture products in low-wage economies?
Why might multinational companies manufacture products in low-wage economies?
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What happens to the profits made by multinational companies in a host country?
What happens to the profits made by multinational companies in a host country?
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How do some multinational companies minimize their tax liabilities?
How do some multinational companies minimize their tax liabilities?
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What can be a consequence of multinational companies leaving a host country?
What can be a consequence of multinational companies leaving a host country?
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Study Notes
Positive Effects of Globalisation
- Global companies can benefit from economies of scale by accessing more markets, resulting in lower costs per unit.
- Job creation is a significant advantage of globalisation, with companies creating direct and indirect employment opportunities in both developed and less developed countries.
Economic Growth and Tax Revenue
- Injections by global companies can stimulate economic growth, such as Intel's €3.63bn investment in its operations in Kildare.
- The presence of overseas firms can generate significant tax revenue, with 1,500 companies located in Ireland contributing €10.9bn in corporation tax in 2019.
Research and Development
- Global companies with the resources for research and development (R&D) can drive innovation, leading to significant advances in areas like technology and pharmaceuticals.
Negative Effects of Globalisation
- Environmental damage occurs due to the over-exploitation of natural resources and pollution.
- Workers are exploited by global companies that manufacture products in low-wage economies with poor working conditions.
- Multinational corporations (MNCs) repatriate profits to their home country, resulting in a loss to the local economy where they are earned, for example, Apple.
- MNCs use tax loopholes to avoid or reduce their tax liabilities, resulting in a significant loss of revenue for the host country.
- These corporations have no loyalty to the host country and can leave at any time, leading to massive unemployment.
- Large firms abuse their power by paying very low prices to suppliers in the host country, such as cocoa or coffee farmers in Brazil.
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Description
This quiz covers the benefits of globalisation, including economies of scale, job creation, economic growth, and tax revenue.
