Reading Assignment 4: Economic Globalization --HE YUNONG

 

Economic Globalization 

 - CorporationsPeter Dicken


1) Summary

The author denies the view that economic globalization has weakened the autonomy of nation-states, and carefully describes and explains the nature and significance of transnational corporations in the process of economic globalization.
The following five points were mainly discussed:

1.The scale and geographical distribution of multinational corporations in the global economy：
In fact, the forms and scales of transnational corporations are different. Global corporations operating in dozens of countries and transnational corporations operating only in one or two countries outside their headquarters have one thing in common, that is, they operate in different political, social and cultural environments. There are more and more kinds of multinational companies in the global economy.
2.why and how the company engages in transnational activities;
Go-to-market investments: Improving profitability will likely depend on expanding markets beyond your home country.
Asset-oriented investment: The assets a business needs to produce and sell its products and services are also very unevenly distributed geographically and may therefore need to be developed in situ.
"Greenfield" investments: building entirely new facilities, but risky.
By collaborating with other firms: By collaborating, firms can combine their capabilities in a mutually beneficial manner.
3.The geographical embeddedness of multinational corporations：
All TNCs, are "generated" through a complex embedded process in which the cognitive, cultural, social, political and economic characteristics of the national base play a major role. The characteristics of the own country and those of the embedded country thus interact to produce a unique set of outcomes.
4."Enterprise network" represented by transnational production network;
All business firms are highly complex and dynamic and embedded in production, distribution and consumption networks. Such networks have a strong regional dimension, and regional strategies offer many of the efficiency advantages of globalization while more effectively addressing the organizational barriers that globalization presents.
5.Power relations between transnational corporations and other actors in the global economy：
The freedom of action of transnational corporations may be limited, and transnational corporations may be powerful, but they do not possess absolute power. All multinational production networks are affected by multiscalar regulatory systems. International regulatory bodies, such as the WTO; international bodies that set technical standards, such as ISO 9000.

2) Interesting items

When introducing the embeddedness of multinational companies, the author cited a sentence from the Russian painter Marc Chagall: Every painter is born somewhere, even if he reacts to other environments later, but a certain place in his hometown An essence, a certain fragrance will always remain in his works. The author argues that Chagall's observations are a better metaphor for the relationship between multinational corporations and territories than many globalizers have of "territoryless" firms. I think it's very interesting, and I agree with the author that this metaphor from Chagall makes it easier to understand.

3) Discussion angle

The author said that the headquarters of multinational companies usually stay in the home country, so are there any special cases?

Comments

  1. LI MINHUIDecember 1, 2022 at 6:22 AM

    After seeing your question, it also aroused my curiosity. So I went to check the information.It is found that the headquarters of many multinational companies have relocated from their own countries to foreign countries.For example, HBC moved from Hong Kong to London, England; Lenovo moved from Beijing, China to Lei, North Carolina; IBM moved from Armonk, New York, USA to Shenzhen, China.

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