Cambridge IGCSE Business (0264) syllabus reference: 6.2.1 to 6.2.4
Reasons for globalisation: improved transport links, technological change including communication, free trade agreements, growth of newly industrialised countries.
| Advantages | Disadvantages |
|---|---|
| Larger markets to sell in | More foreign competition |
| Cheaper materials and labour abroad | Loss of local customers to imports |
| Can set up operations in other countries |
Tariffs and quotas protect domestic businesses from imports, but raise the cost of imported materials and may lead other countries to retaliate.
| Advantages | Disadvantages |
|---|---|
| Jobs and training | Competition for local businesses |
| Exports and tax revenue | Environmental damage |
| More choice for consumers | Exploitation of natural resources |
| Investment in infrastructure | Profits sent back to the home country (repatriation) |