What is the relation between economics and globalization?-Hong Da Hyeon

1) Summary

The link between economics and globalization is clearly seen when we look at the activities of TNCs. Even if TNCs exist trans-nationally or look oblivious to national interest, they are regulated by political- institutional-cultural situation of their country of origin. The motive behind TNC proliferation is focused less the aim to get an overall control of the world economy, but more on the quest for new markets, cost benefits and specific resources available in certain regions. At the same time, globalization does not eliminate the power of the state. While TNCs may wield significant economic influence, they still rely on states for access to markets, legal protection, and regulatory approval. This creates a dynamic relationship in which neither side consistently dominates; instead, power shifts depending on context, negotiation leverage, and global economic conditions. In this sense, economics and globalization are intertwined through a continuous negotiation between corporate interests and state authority.

2) Interesting part

One particularly intriguing idea is that globalization does not erase the identity of a corporation. Even as companies expand abroad, they bring with them managerial styles, technological standards, and cultural assumptions rooted in their home country. These “corporate fingerprints” shape how firms build supply chains, interact with consumers, and adapt to local markets. Another interesting aspect is the coexistence of competition and cooperation among TNCs. Strategic partnerships, joint ventures, and technology-sharing agreements can strengthen firms, but they do not necessarily eliminate competition. Instead, they create a landscape where rivals may cooperate in one sector while fiercely competing in another. This duality challenges the simplistic view that globalization inevitably leads to monopolistic dominance and instead highlights the complex economic ecosystem shaped by interdependent firms.

3) Concern and discussion

As globalization deepens, countries often modify regulations to attract investment, sometimes lowering tax rates or easing restrictions. While this can stimulate economic activity, it may also widen the gap between highly mobile corporations and less mobile workers or communities. If states engage in a “race to the bottom,” TNCs may gain disproportionate bargaining power, weakening labor protections or reducing public revenues. Another concern is how technological change will reshape the balance between states and corporations. With digital platforms, AI-driven production, and data-centered business models, a small number of TNCs may accumulate unprecedented influence. If advanced technologies become concentrated in the hands of a few firms, governments may struggle to regulate them effectively. This raises pressing questions: Will states remain the ultimate decision-makers in the global economy? Or could certain corporations grow powerful enough to challenge traditional political authority?

Ultimately, the relationship between economics and globalization is neither linear nor predetermined. It is a constantly evolving process in which states, corporations, and societies negotiate power, adapt to technological change, and respond to shifting global conditions.


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