Impact of Corporations in Developing Nations

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Questions and Answers

What is the most likely immediate impact on the host country's economy when an international corporation opens a new branch in a developing nation?

Decrease in foreign direct investment

Local businesses becoming global corporations

Creation of jobs and economic growth (correct)

Increase in unemployment

This conflict illustrates tension between what concepts?

National sovereignty and global governance (correct)

Supranationalism and local governance

Global citizenship and cultural identity

Regionalism and globalism

What would World Polity Theory suggest is the primary reason for a developing country adopting global standards in education and human rights due to international pressure?

Genuine belief in the superiority of these standards

To maintain the country's unique cultural identity

To reject the influence of core nations

To align with global norms and gain legitimacy in the international system (correct)

What is the phenomenon described as the globe 'shrinking' due to advancements?

We can travel and communicate much quicker than we could years ago. Signup and view all the answers

What is the most likely consequence for a local clothing company facing competition from foreign brands due to free trade agreements?

Forced to reduce prices or improve quality to remain competitive Signup and view all the answers

Which of the following describes the principle of state sovereignty in the global interstate system?

States have the right to govern themselves without external interference Signup and view all the answers

How do core countries affect peripheral countries according to World-Systems Theory?

Peripheral countries remain dependent on core countries for technology and capital Signup and view all the answers

What is a transnational company?

Large global firms that operate in a number of countries Signup and view all the answers

Which of the following best describes a common characteristic of countries in the Global South?

Higher poverty rates and less developed economies Signup and view all the answers

Which of the following is considered part of the 'Global North'?

Canada Signup and view all the answers

What is it called when factories or aspects of industry are relocated to a place that is cheaper to do business?

Offshoring Signup and view all the answers

What does TNC stand for?

Transnational corporations Signup and view all the answers

What might be a consequence of significant brain drain as a nation's skilled workforce moves to developed countries?

Slower economic growth due to loss of talent Signup and view all the answers

Which of these is an example of economic changes in the global context?

Electronic banking Signup and view all the answers

What is a policy in which a nation does not try to limit imports or exports by enacting tariffs or subsidies?

Free Trade Signup and view all the answers

The movement of jobs from the U.S to countries like India is an example of what?

Offshoring Signup and view all the answers

McDonald's is an example of a multinational corporation.

True Signup and view all the answers

The Non-Aligned Movement (NAM), founded during the Cold War, primarily consisted of what?

Countries from the Global South that did not align with either superpower Signup and view all the answers

Study Notes

Economic Impact of Foreign Corporation Involvement in Developing Nations

Opening of a new branch by an international corporation enhances local employment opportunities.
Job creation serves as a direct boost to the host country's economy, reducing unemployment rates.
Technology transfer occurs, facilitating local workforce skill development and innovation.
Increased economic activities from the corporation can lead to overall economic growth.
Local supply chains might strengthen, as businesses that provide services and products to the corporation expand.
Potential for small local enterprises to evolve into larger, possibly global businesses through partnerships or supply contracts.
Long-term foreign direct investment could increase as a result of successful operations, countering the initial investments and economic stability.

Economic Impact of International Corporations

Opening a new branch in a developing nation leads to job creation and technology transfers.
immediate economic impact includes significant job creation and growth.

Tensions in Global Governance

National sovereignty clashing with global governance is a key issue when a country refuses UN criticism, citing self-governance.

Adoption of Global Standards

World Polity Theory suggests countries adopt global standards in education and human rights to align with norms and gain international legitimacy.

Global Trade Dynamics

Trade is characterized by the exchange of goods driven by resource needs, presenting opportunities for fair trade practices.

Global Shrinking Phenomenon

The globe is perceived as 'shrinking' due to instant communication and faster travel compared to the past.

Consequences of Free Trade Agreements

Local companies in developing nations face intense competition from foreign brands, often leading to reduced prices or improved quality to sustain competitiveness.

Principle of State Sovereignty

In the global system, state sovereignty means countries govern themselves without external interference, maintaining policy independence.

World-Systems Theory Perspective

Peripheral countries remain dependent on core countries for technology and financial capital, benefiting unevenly from the global economy.

Characteristics of Transnational Companies

Transnational companies are large global firms operating across multiple countries, playing a major role in global commerce.

Global South Overview

Countries in the Global South are characterized by higher poverty rates and less developed economies, contrasting with industrialized nations.

Global North and South

Canada is classified within the "Global North," while countries like Brazil and India fall under the Global South.

Economic Policies: Offshoring and Outsourcing

Offshoring refers to relocating business operations to lower-cost regions, while outsourcing involves hiring external entities for services.

Brain Drain Effects

Significant brain drain results in slower economic growth due to the loss of a skilled workforce to more developed countries.

Economic Changes and Global Context

The emergence of electronic banking indicates a significant shift in economic practices on a global scale.

Free Trade Policies

Free trade policies promote unrestricted import and export practices, not reliant on tariffs or subsidies.

Job Movement Examples

Offshoring and outsourcing exemplify the trend of relocating jobs from high-cost countries like the U.S. to lower-cost regions such as India.

Multinational Corporations

McDonald’s serves as a prime example of a multinational corporation, demonstrating global business presence.

Non-Aligned Movement (NAM)

The NAM consisted of countries from the Global South that did not align with either the U.S. or Soviet Union during the Cold War, emphasizing independence in international relations.

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Description

This quiz explores the immediate economic impacts when an international corporation opens a new branch in a developing country. Analyze the potential effects on employment, investment, and local businesses to understand globalization's role in economic development.