MNC And Globalization

AP Comparative Government and Politics: Briefing Paper (Questions and Responses)

Q1. Define “globalization”. Explain some of the interconnections that characterize globalization.

A1. Globalization, driven by advanced technological innovation, is the process that results in the rapid growth of interconnectivity of the world; this inevitably prompts increasing interdependence between economies, political system, and societies. This interconnection, is characterized by sensibility and venerability, would induce each nation becoming more sensitive to the decisions and actions of others, and more vulnerable to the effects of others’ choices and actions. The two fundamental aspects of interconnectivity forces governments to consider both internal

Foreign Direct Investment (FDI) is a type of economic transaction in which corporations based on one country make investments on other countries to establish and run business operations. FDI, the largest form of private capital inflow to developing countries, elevates the economy by bringing technical information, jobs, and the transmission of ideas. China, which has opened up itself for trade and FDI, has seen a growth in its income per capita; for example, China’s income per capita rose from $1,460 in 1980 to $4,120 in 1999.

Q4. What are “MNCs” and what is their role in economic globalization? What percentage of the world’s exports are accounted for by MNCs? Why have MNC’s become a political force?

A4. Multinational Corporations (MNCs) are enterprises that fan out from their home countries in search of new markets, more resources, better investments, and cheaper labor in foreign host countries. Apple, for example, is a MNC based on the United States; it invests in the Chinese market through producing iProducts there. MNCs, which account for one-third of the world’s exports (33%), can additionally function as political forces as they account for a major portion of a foreign nation’s FDI. Moreover, MNCs are forced to take international political decisions in order to maintain a profitable market for their goods and

States, international organizations, and multinational corporations are not the only actors that have had to react to the challenges presented by globalization. In other words, even the average citizen has been affected by the changes of globalization; for example, an upsurge in public awareness and a sense of connectivity introduced the concept of global citizenship. A transnational advocacy network is a set of relevant actors working together to solve international issues; they are bound by shared values and a common discourse. Increasing globalization provides transitional groups to recruit, raise funds, and to efficiently operate internationally. The result is the emergence of a global mass politics, a way for societies to express their needs and expectations to the