What is the relation between economy and globalization?"/ Minji Moon

 

(Summary)

Most agree that transnational corporations (TNCs) are central to the primary aspect of the global economy amid disagreements over economic globalization. In fact, there is a widespread view that we are living in a world of global enterprises that show off national autonomy without trampling on the huge footprints beyond the border. In reality this is a very misleading stereotype. Therefore, this article explains the TNC's character and significance in the course of economic globalization and describes its approach based on the empirical reality of highly differentiated geography. Each chapter focuses on the size and geographic distribution of the TNC in the global economy, the reasons and methods for conducting transnational activities, the geographic nesting of transnational enterprises, the 'corporate group', the power-related issues that appear in transnational production networks.

Indeed, the TNC has all its forms and sizes, from so-called global companies operating in dozens of countries to TNCs operating only in one or two countries outside its home country. What they all have in common is that they work in different political, social and cultural settings.
Most of the world's FDI is directed toward developed countries. Less than a third of the world's FDI totals are in developing countries. Indeed, most of FDI is made up of cross-investment between developed countries. Of course, developing countries have significant FDI and are growing. But this is far less than the public opinion suggests, and in any case it is highly concentrated in very few countries, especially parts of East Asia and Latin America. Nevertheless, the number of TNCs originating from major developing countries is undoubtedly increasing. The diversity of TNCs in the global economy is increasing. 

Continuing to influence the positioning of the TNC are the size of the market and specific characteristics. Because of the geographical imbalance in the market, companies participate in transnational investment.  In addition, geographically, the assets that an entity needs to produce and sell its products and services are very unevenly distributed. Therefore, it may have to be used in the field, which is the second reason.

Place and geography are fundamentally important in how companies behave. All enterprises, including the most geographically diverse TNCs, are 'produced' through a complex embedding process in which the cognitive, cultural, social, political and economic characteristics of the national home base play a dominant role. Therefore, the TNC is a  ‘bearers’ with such characteristics and interacts with the location-specific characteristics of the countries and communities operating to produce a series of results.

This article is focused on the enterprise. But it is insufficient in some ways to regard such an organization as an independent entity with a clear boundary. Conversely, every business enterprise consists of a highly complex and dynamic enterprise and is internal to it.

There is a territorial imbalance between the successive territories of the state and the discontinuous territories of the TNC. This is not ambiguous, unlike many conventional wisdoms. It is also a complicated negotiation process that is completely unpredictable.  As some people continue to argue, the TNC does not always have the power to go its own way. The outcome of a particular negotiation process in the complex relationship between the TNC and the state as well as other agencies is highly accidental. Each state controls access to its territory and sets operating rules. Each state still has considerable authority over the TNC. And in cooperation with other states, increase its power (EU is an example of this). Therefore, it is absurd to argue that the state is universally powerless in front of 'global enterprises'.

(Interesting point)

I haven't thought much about TNC. So I learned about what TNC is by reading this article. What was interesting was that economic globalization was influenced by spatial and geographical characteristics. It may be natural that each country's geographical merits are related to its economy. But looking at this from a sociological point of view was new. And it also found inequality.

(Discussion)

Is the spread of TNC beneficial to our economy?