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Sem 5 Prep
← Intl TradeWhat globalization actually is

Formulas for this chapter

Foreign content share

Foreign content share = imported input value / total factory cost

Whenever a question asks how globalized a product's production is, or asks what happens to that when a supplier is moved. Recompute the denominator whenever the total cost changes.

Imported input value
Cost of every component and service bought abroad
Total factory cost
Foreign plus domestic content, in the same currency

Re-export margin

Re-export margin = re-export value - original import value

When goods are imported and sent on without significant processing. Gross trade rises by the sum of both flows while value added is only the margin.

Re-export value
Price at which the unaltered goods leave the country
Import value
Price at which they entered
Step 3 of 25
The real wordsTheory

The four types

Slide 3 is a picture with no text, so this list is rebuilt from the slides that follow it and from your own note.

  • Economic globalization: integration through trade, investment and capital flows
  • Financial globalization: integration of financial markets, free movement of capital
  • Cultural globalization: convergence of cultures
  • Political globalization: convergence of political systems and processes

Economic globalization is the one that splits further, into five dimensions. Check against your class slides.

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