The Global-Local Dilemma

3719 WordsJul 11, 201215 Pages
The Global-Local Dilemma: Foundations of International Strategic Management, Ethics and Social Responsibility What is meant by Globalization? Form 5 Groups, discuss the questions below for 30 Minutes in your group; each group presents its findings to the class. What is Globalization? What is being “globalized”? Establish a ranking of degree of globalization. Develop a definition and discuss your definition in terms of the factors below Advantages, Disadvantages, Opportunities, Threats For participating and not participating For Nations, Companies, Individuals Globalization Defined Many authors have attempted to define globalization. Despite differing opinions about developing a definition, all authors agree on one thing: that defining…show more content…
Copyright: Peter B. Grubenmann The Ricardian Model The Gains from Trade – If countries specialize according to their comparative advantage, they all gain from this specialization and trade. – We can think of trade as a new way of producing goods and services indirectly by importing and paying for them with goods and services we are specialized in and have a comparative advantage. Copyright: Peter B. Grubenmann The Ricardian Model The Gains from Trade (cont.) – The gains from trade affect the consumption in each of the two countries. – The consumption possibility frontier states the maximum amount of consumption of a good a country can obtain for any given amount of the other commodity it wants to give up or trade-off. – In the absence of trade, the consumption possibility curve is the same as the production possibility curve, which means that a country can consume only what it produces. – Trade enlarges the consumption possibility for each of the two countries. Copyright: Peter B. Grubenmann The Ricardian Model Trade Expands Consumption Possibilities Quantity of wine, QW T P F Quantityof cheese, QC (a) Home T* P* Quantity of cheese, Q*C (b) Foreign Copyright: Peter B. Grubenmann Quantity of wine, Q*W F* The Ricardian Model Adding Transport Costs and Non-traded Goods • There are three main reasons why specialization in the real international economy is not extreme: – The existence of more than one factor of production. – Countries sometimes protect
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