Globalisation (Edexcel IGCSE Economics): Exam Questions

The largest manufacturer and exporter of clothing products is China, with 65% of the world’s clothing being made there. The second largest country for clothing manufacturing is Bangladesh. Clothing exports make up nearly 85% of Bangladesh’s total exports.

With reference to the data above and your knowledge of economics, analyse the likely benefits of globalisation for clothing manufacturers.

According to a survey from accounting firm EY, foreign direct investment (FDI) into Ireland increased by 52% in 2018.

With reference to the data above and your knowledge of economics, analyse the benefits of FDI for a country such as Ireland.

Approximately 12% of goods traded globally are via international e-commerce. Tens of millions of small and mid-size firms worldwide have become exporters by joining e-commerce marketplaces such as Alibaba and Amazon.

Explain one reason why the reduced cost of communication has helped to increase globalisation.

By volume, 90% of world trade of goods are transported by sea in containers. There are 5,000 container ships in the world and the largest carries more than 20,000 containers. It now costs only $0.05 to ship a t-shirt across the world from low-cost countries such as Vietnam.

Explain one reason why the reduced cost of transport has helped to increase globalisation.

The World Trade Organisation (WTO) has estimated that improvements in ship containerisation have lowered sea transportation costs by over 70%. Air-freight costs have fallen by a similar amount.

Analyse how the reduced cost of transport has contributed to the increase in globalisation.

Palm oil is used in food and cosmetics. Palm plantations are a major agricultural activity in Indonesia. Many of the plantations are owned by foreign multinational corporations (MNCs).

Explain one advantage for Indonesia of the palm oil plantations being owned by foreign MNCs.

The consumption of avocados in the US used to be restricted to the summer months when farmers in California harvested their crops. Now avocados are available all year and 90% are imported from Mexico.

Explain one way globalisation has affected consumers in the US.

In August 2018, Mondelez, a food and beverage multinational corporation (MNC), opened its first factories in Bangladesh. Previously, Mondelez had been exporting its products into Bangladesh for 15 years.

Analyse why a MNC, such as Mondelez, might want to invest in Bangladesh.

According to the UN there are now over 63,000 multinational corporations (MNCs) and the number is growing daily. Many well-known MNCs, including PepsiCo, the Tata Group and Microsoft, are expanding in India.

Explain one possible reason for the emergence of MNCs in a country such as India.

A shoe manufacturer currently produces all of its shoes in one factory in its home country. The company is considering opening new factories in several other countries instead.

Explain one reason why the company might choose to manufacture in several different countries rather than just one.

A car manufacturer currently sells its cars only in its home country. It is considering setting up a dealership network and marketing operations across several other countries.

Explain one reason why becoming a multinational corporation might benefit this car manufacturer.

A government in a developing country has recently attracted several large multinational corporations to open factories in the country.

Explain one way in which this might affect the government of the country.

A fictional country, Verdland, has recently reduced trade barriers and become more open to international trade and investment, allowing several large multinational corporations to set up manufacturing operations there.

Analyse the impact of increased globalisation on producers in Verdland.

A different fictional country, Halvorra, has seen several long-established domestic manufacturing firms close down after multinational corporations opened competing factories offering similar products at lower prices.

Analyse the impact of increased globalisation on workers in Halvorra.

In 2022, Kazakhstan’s foreign direct investment (FDI) increased by 17.8% to reach $22.1bn. With its huge amount of natural resources such as oil and gas and agricultural lands, Kazakhstan is the richest country in central Asia.

The top four countries investing in Kazakhstan in 2022 were the Netherlands, the US, Switzerland and Belgium.

According to the Deputy Minister of Foreign Affairs, the growth in FDI reflects foreign investors’ confidence in Kazakhstan due to its ongoing government reforms and low costs of production.

With reference to the data above and your knowledge of economics, evaluate the advantages of an increase in foreign direct investment (FDI) for a country such as Kazakhstan.

Kenya is the third largest exporter of cut flowers in the world, accounting for 1.3% of its GDP. Kenya’s main airport has a terminal dedicated especially to the transport of flowers and vegetables.

The Kenyan flower industry has created many employment opportunities. Around 100,000 people are employed directly on the flower farms and over 500,000 people benefit indirectly from this industry.

Over half of Kenya’s 127 flower farms are concentrated around Lake Naivasha due to the large amount of water needed to grow the flowers. Some environmental campaigners have expressed concerns over the impact that the flower industry could have on the lake.

With reference to the data above and your knowledge of economics, evaluate the likely benefits for Kenya of the globalisation of its flower industry.

Since 2016, 24 Japanese multinational corporations (MNCs) have invested in Bangladesh. This takes the total to 269 Japanese MNCs in Bangladesh. Low wages and the low cost of production are the main reasons for locating in Bangladesh. The cost of production is four times higher in China compared to Bangladesh.

Investments in Bangladesh have been made by Japanese automobile firm Honda and steel manufacturer Nippon Koei. Nippon Koei has invested $59.19m and recruited 2,500 employees to work in its steel factories.

With reference to the data above and your knowledge of economics, assess the benefits that MNCs bring to a country such as Bangladesh.

In 2025, Foxconn (a Taiwanese company that manufactures products for Apple) invested $1.5 billion in new iPhone-component factories in India. Its Bengaluru facility alone hired close to 30,000 workers in under a year, with more than 70% of new hires being women aged 19 to 24. India's share of global iPhone production rose from 18% in 2024 to an expected 32% by 2025.

Assess whether India has benefited more from this increase in FDI than Foxconn and Apple have.

Bangladesh's ready-made garment (RMG) industry earned $39.35 billion in exports in 2024–25, an increase of 8.84% on the previous year. RMG now makes up around 81% of Bangladesh's total exports and employs more than four million workers, over 57% of whom are women.

Assess whether the growth of Bangladesh's garment export industry has been more beneficial for workers than for the country's economy as a whole.

Vietnam has been Nike's largest manufacturing base for four years in a row. In 2025, Vietnamese factories produced around 50% of all Nike-brand footwear and 34% of Nike-brand apparel, employing over 460,000 workers across 142 factories.

Assess whether Vietnam benefits more from hosting Nike's manufacturing operations than it risks by depending so heavily on a single multinational corporation.

The UK's textiles and clothing industry has shrunk significantly as production has moved to lower-cost countries overseas. The industry has lost 71,000 jobs since 2019, and its value added nearly halved from £10.8 billion in 2011 to £5.1 billion in 2023. Fewer than 400 UK textile factories now employ 10 or more people, compared to thousands in previous decades. Meanwhile, the average cost of an item of clothing in the UK has fallen in real terms, reaching £16.70 in 2023, partly as a result of outsourcing production to countries with lower labour costs.

Evaluate whether increased globalisation has been more costly than beneficial for the UK.

In 2024, the European Court of Justice ruled that Apple must pay Ireland over €13 billion in back taxes, after finding that Apple had been paying an effective corporation tax rate as low as 0.005% for years through arrangements with the Irish government. Apple's European headquarters in Cork employs over 6,000 people.

Evaluate whether the Irish government should have done more to prevent this kind of tax avoidance by multinational corporations.