Globalisation: opportunities and risks

Define globalisation and describe its economic, cultural, and technological dimensions with an everyday example of each.

Explain what a multinational company is and describe the potential global supply chain of a T-shirt: where it is designed, where the cotton comes from, where it is sewn, and where it is sold. What does this journey show about modern production?

Name three factors that have driven globalisation (transport, communications, and trade liberalisation) and explain with an example how each contributes.

In the supermarket there are strawberries in December and grapes in May, brought from the other hemisphere. Explain what this phenomenon shows about the globalisation of food and name one advantage and one cost (environmental, of quality) of eating "in season all year round".

A conflict in a faraway region makes wheat and gas dearer, and a month later bread goes up in your neighbourhood. Use this example to explain what world economic interdependence is and why "no country is an island" in today's economy.

What is the offshoring of production? Give an example of a company that moves its factory to another country and explain what reasons it usually has (labour costs, regulations, proximity to suppliers) and what effects it produces in the country that loses the factory and in the one that receives it.

A shoe factory in a town closes and moves production to another continent: $120$ people lose their jobs.

1. a) Analyse the direct and indirect local effects (businesses, local council, families).
2. b) What policies could help restructure the town? Propose two and assess their timelines.

A multinational decides to close a Spanish plant that is profitable, but less so than another one it will open on another continent.

1. a) Who makes that decision and on what criteria (costs, margins, global strategy)? What room for manoeuvre does the local government have (aid, negotiation, closure rules)?
2. b) What does this case show about the asymmetry of power between large global companies and local areas? Reason what States can do, alone or coordinated.

The figure shows how the final price of a €100 pair of sneakers is distributed among the stages of its value chain.

The government of a developing country plans to allocate public funds to subsidise the establishment of assembly plants to double its industrial footwear production, trusting that this stage will enable it to capture most of the wealth generated in the sector.

1. a) Interpret the data from the graph applying the "smile curve" theory of the global value chain and critically evaluate the economic limitation of the government's plan to raise the country's average wages and GDP in the long run.
2. b) Assume that wage costs in the manufacturing stage increase by 25 % in the producing country. If the multinational corporation that owns the brand decides not to pass this cost increase on to the final retail price of €100, predict what organisational or offshoring adjustments it might adopt and how they would affect the country.
3. c) Design two public policies aimed at helping this country transition towards the higher value-added segments of the chain, justifying what barriers to entry it will face in each case.

Ivory Coast and Ghana account for nearly 60 % of the global cocoa bean harvest, yet they retain less than 6 % of the total value generated in the chocolate industry, the bulk of which is captured in developed importing countries.

1. a) Analyse how the practice of "tariff escalation" (imposing very low tariffs on unprocessed raw materials and increasing tariffs on derived manufactured goods) contributes to perpetuating this trade pattern and blocking industrialisation in origin countries.
2. b) A report argues that it would be enough for these countries to build cocoa processing plants to capture most of the sector's profits. Critically evaluate this statement by analysing the importance of intangible assets (trademarks, global logistics networks, and access to final sales channels).
3. c) If producing countries were to form an export cartel to set quotas and substantially raise the international price of cocoa beans, predict the short- and long-term consequences of this measure on their fiscal revenues and on the incentives of processing multinationals.

Spain exports cars and components, and imports microchips and energy.

1. a) What does that pattern show about the country's productive specialisation?
2. b) Explain what risk the world chip crisis revealed for Spanish factories and what the expression "strategic autonomy" means.
3. c) In which sectors do you think a country should avoid total dependence on the outside? Justify two examples.

Present two opportunities and two risks of globalisation for a country like Spain, using concrete examples: markets for its firms, lower prices, offshoring, and external dependence.

Data shows that global poverty has fallen significantly over recent decades, but inequality within many countries has increased.

1. a) Explain how globalisation can produce both effects at the same time.
2. b) Who would be the "winners" and "losers" of globalisation within a rich country? Reason your answer.

In the debate on the future of the international economic order, some analysts argue that we are facing a process of "deglobalization", while others claim that it is merely a "profound reconfiguration" of international flows.

1. a) Interpret recent empirical trends to contrast both hypotheses: compare the evolution of global trade in physical goods and raw materials with the performance of trade in digitally delivered services, cross-border data flows, and patents.
2. b) Analyze the macroeconomic consequences on global productivity and on long-term inflationary pressures generated by the transition from cost-driven relocation (offshoring) to production in allied or geographically close countries (friendshoring and nearshoring).
3. c) Evaluate what specific opportunities and risks this new scenario poses for the Spanish economy, taking into account its productive structure (tourism, automotive, renewable energy, and knowledge-intensive services).