1. Summary
I read Peter Dickend's 'Economic Globalization' and had a time to compare it with the globalization from various perspectives of view that I have posted on the blog so far. Economic Globalization was a bit more difficult to understand than globalization from other perspectives, so it took more time to understand.
Especially, This article shows 5 issues of TNC on Economic Globalization:
(1) The scale and geographical distribution of TNC in the global economy
(2) Why and how corporations engage in transnational activities
(3) The geographical embeddedness of transnational corporations
(4) The 'webs of enterprise' manifested in transnational production networks
(5) The power relationships between TNCs and other actors in the global economy
I try to write this posting based on the concept of globalization that I have understood until now.
Globalization can not be equated with the imperialism in the 19th century or the deepening of internationalization in the mid-20th century. Internationalization refers to an increase in inter-national trade, which is represented by trade, investment, and capital movements, while globalization means that economic activity takes place in trans-national form beyond the national state. Especially in economic terms, this means that the social division of labor in a broad sense (production, distribution, etc.) goes beyond the boundaries of the national state. For example, globalization involves the emergence and activity of transnational corporations(TNC). The corporate model under internationalization is corporations that export finished products or multi-national corporations(Each branch produces and sells goods only within the country in which it is located). On the other hand, as described by geographer 'Peter Dicken', the model of a transnational corporation(TNC) exchanges several different types of finished products or parts produced by each branch office in the most favorable conditions (especially prices) in the local context. In other words, it is the globalization of production and sales. It is possible to organize various spatial organization of economic activities. Production factories located in different countries each take a stage of production process or function as a parts production factory.
Therefore, globalization is a specific form of space-time restructuring. The mere globalization as the global expansion of the modern capitalist market, or the compression of space-time distances, does not give insight into the reorganization of these time and space. As long as the globalization process is a concrete social and economic activity, it does not connect all the places on the earth and shorten the distances between them to the same extent. In fact, globalization is concentrated in Europe, North America, and East Asia, and trade is concentrated within each region. Therefore, globalization can be seen as a regional expansion rather than a global expansion of the market. This phenomenon is most prominent in the European Union, which has moved to monetary integration, but it is also found in NAFTA and ASEAN. This disparity in globalization is related to the geographical inequality of economic development. The accumulation of capital depends on the temporal and spatial difference of the production factor price or quality. Countries and corporations are actively creating and maintaining this difference which is one of the factors that causes geographical inequality in the economy.
2. What is interesting?
After reading this article, I could learned about TNCs. I was very interested in transnational corporations(TNCs) and wanted to study more.So I studied more about the transnational corporations.
According to the Naver Knowledge Encyclopedia, transnational corporations are companies that produce and sell on an international scale from all over the world. According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2009, there are about 82,000 transnational corporations operating globally and about 810,000 foreign subsidiaries of these TNCs spread across the globe. The proportion and diversity of TNCs is increasing in the global economy. I think Samsung is the most representative example of transnational corporations in Korea.
Transnational corporations(TNCs) will grow in the world. I think transnational corporation(TNC) is the key that solves cacophony of opinions on economic globalization. I felt that it is important to know the transnational corporations in order to develop companies in the era of globalization. Because The power of the TNC is the potential to capitalize on the geographical differences in resource availability and cost.
3. Discussion Point
Due to the effects of economic globalization, the constraints of time and space are reduced and global trade liberalization is expanding. In other words, the disappearance of distance is saving time and money, and the world market is being integrated. This is the advantage of economic globalization. But I am concerned about the disadvantages of economic globalization. I think the biggest problem is that the economic power gap between the countries with high economic power and the countries with low economic power is deepening. For example, developing countries are focusing exclusively on economic growth, ignoring environmental protection and welfare policies. And developed countries seek only their profits, exploit the resources of developing countries and ignore the society, laws, public and traditions of the developing countries. In addition, transnation corporations often dominate the resources and labor force of developing countries.
In the future, transnational corporations will move freely across the globe to promote division of labor globally and seek tremendous monopoly profits. As a result, companies will perform automation and manpower reductions to survive in a world of infinite competition. Economic globalization will proceed with deepening inequable development with various dilemmas and difficulties. I would like to discuss what kind of measures can be taken to solve(or reduce) this inequality growth.
About the discussion point you have mentioned.
ReplyDeleteI want to mention how China has grown significantly in the last few years. China was underdeveloped country but now labor costs and the quality of products have both became higher. Not to mention the government, but also citizens of China have earned a lot of money and thus their lives became much different nowadays. Of course, there is a huge disparity in income between China but that is the problem to be solved by institutions of China. Now the china is the world second powerful country.
I admit that China could be the extraordinary example, but I think the economic power can change. My opinion is that the world could be more symmetrical with market power and political regulations.