Reading 4: What is the relation between economy and globalization? MINJI JEONG

 1. Summary

     Opinions on economic globalization vary. Indeed, regardless of political position, everyone accepts the view that we live in a world of global companies. The huge footprint of global companies is characterized by trampling on borders unobstructed and neutralizing the autonomy of the nation-state. Economic globalization represents a symbol of multinational corporations (TNCs).
     The article has some focus on economic globalization. The first is the size and geographical distribution of multinational companies. Their activities outside their home countries and the development of the company are part of the initial development of the international economy. This form develops and takes the form of a global company (TNC). They are called 'placeless' giants that operate across global companies, across the world, and are not loyal to a particular country or community. TNC activity is usually measured using Foreign Direct Investment (FDI) statistics. The majority of FDI consists of cross-investment between developed countries, and in addition, there is a significant increase in developing countries. It can be seen that TNC is increasing in the global economy.
     The second is why companies are shifting to multinational investment. It is possible that the domestic market has reached a saturation point. Therefore, it may have been inevitable to expand the length beyond the home country to improve profitability. It identifies new markets that require direct existence to provide efficient services.
     Next is asset-driven investment. Geographic heterogeneity in the market is one of the main reasons why companies participate in multinational investments. The second reason stems from the fact that the assets required for a company to produce and sell products and services are geographically unevenly distributed and may need to be utilized in the field.
     The most important feature is the 'web of companies': a multinational production network. Although the focus of this chapter is on 'enterprises', it is inappropriate to think of such organizations as 'independent' and clearly bounded independent entities in some way. On the contrary, every business organization is composed and embedded in a highly complex and dynamic organization.

2. Interesting items

     There is a territorial asymmetry between the successive territories of the state and the discontinuous territories of the transnational state, which, contrary to many conventional wisdom, is interpreted as a complex negotiating process with no clear and completely predictable results. Transnational corporations do not always have the power to go their own way, as some writers continue to argue. In the complex relationship between transnational corporations, states, and other institutions, the consequences of certain negotiation processes are very accidental.The state still has considerable authority over the TNC, for example, controlling access to territory and defining operating rules. The power increases in cooperation with other countries (the EU is an example of this). So, it was interesting to note that the claim that the state is universally powerless in the face of the unstoppable 'global corporation' juggernaut is nonsense.


3. Discussion point

     Multinational corporations are loved all over the world, but they are also criticized in their own countries. For example, in order to establish a global position or to achieve more than that, there are cases where product prices are received at lower prices in other countries than in their own countries. What do you think about economic globalization caused by globalization and the actions of domestic companies?

Comments

Popular posts from this blog

[Hofstede's dimensions] Comparing South Korea, China & Japan

Hofstede's dimensions_ Comparing South Korea, China, Japan (MINJI JEONG)

Reading Assignment 4: Economic and Globalization -CAI YAYU