Question 1 - 35/100 marks

Explain how the distance theory can be applied to the cause of Deglobalisation, by drawing examples
from today’s world economy?

What is the Distance Theory – (Keeping Globalization Grounded )

Distance theory identify the Cultural Distance , Administrative Distance , Geographical Distance and
Economical Distance between the globalized counties, this explanation we can use the Cage Distance
Framework theory and we can see how these distance theories applied to Deglobalisation,

What is CAGE – and How its Effected to Globalization

Cultural Distance - Different between the culture ,such as language , religion , Values and social
groups.

Administrative Distance – Different between counties institutional System, such as legal framework ,
political system and even trade agreements.

Geographical Distance- The Physical different between countries (climate, Environment, whether) this
Can even be infrastructure related , such as road and supply chin network

Economical Distance- Different between consumes, Size of economics and availability of resources.

Cultural Administrative Geographical Economical

Distance Distance Distance Distance

-Different language -lack of colonial ties -Physical distance -Differences in

-Different Ethnicities / -lack of shared -lack of land consumers
Bilateral lack of connective -lack of common border incomes
Measures thermic or social currency -Differences in - Differences in
networks -different legal system climates (and availability of :
-Different Religions -political hostility disease
-Different in national environments ) 1-Natural
work systems resources
-Different values norms 2- Financial
values norms and resources
dispositions 3- Human
resources
4- Intermediate
input
5- Infrastructure
6- Information or
knowledge
-Nonmarket/closed -Landlockedness - Economic Size
Unilateral -Traditionalism Economy (home bias -Geographic Size -Low per capita
Measures -Insularity versus foreign bias ) -Geographic income
-Spiritualism - Nonmember ship in Remoteness -Low level of
-Inscrutability international Monetization
 organized - Limited
- Weak legal / Infrastructure,
Institutions/ other specialized
corruptions Factors

-Lack of government
checks
and balance
-Societal conflict
-political
Expropriation risk

What is Deglobalisation –

Deglobalisation mean due to above discussed distance , some counties processing of diminishing
interdependence and integration between certain units around the world ,typically, nation – States. It
is widely used to describe the periods of history when economic trade and investment between
countries decline –

Why Deglobalisation –

- Weakness of international governance Structures

- A general trend of reducing trust between people, between people and leaders, and
institutions
- The impact of the crisis
- Increasing environmental threats & economic and social inequalities

Brief Example –

01
BREXIT – BRITISH EXIT FROM THE EUROPION UNION

RESONS – (Distance)

- More Saving for British citizens

- Higher Trade and Productivity
- Skill Based immigration polices
- Less regulation
- New market
- Buying British

Disadvantage of BREXIT or Deglobalisation

- Loss of single market

 - Lack of investment
- Lack of job Creation
- Possible Tariff on export to EU

02
Now we have good example its corona virus (covid 19)

The rapid extensive spread of COVID 19 is partly a crisis of globalization , the pandemic gives us an
opportunity to rethink our global economic system in favor of de globalization.

03

GERBER BABY FOOD PRODUCT is failed in Africa due to cultural Distance (Language Buriers)

When Gerber a Nestle owned purveyor of baby foods first started selling their baby food in Africa , they
used the same packing as in the USA with the cute baby on the label, later they found out that in Africa
companies routinely put pictures on the label of what is inside the package , since most people cant read