What is the relation between economics and globalization? - Im Jaeyeong

 1. Summarize

This article corrects common misconceptions about transnational corporations (TNCs), key actors in economic globalization, and analyzes their true appearance and influence.

We often think of the TNC as a giant "global dinosaur" that arbitrarily crosses national borders and neutralizes state power. However, author Peter Deakin says this is a misleading stereotype.

The author explains the characteristics of TNC in five ways. First, TNCs occupy a large part of the global economy, but very few 'global companies' truly mean it. Most are still based in their home country. Second, the reason why companies go abroad is not just to expand the market, but to obtain assets (Asset) that are only in certain regions, especially skilled labor or skills. Third, companies are not 'placeless' beings, but are deeply rooted in the culture and institutions of their country of origin. For example, Japanese companies and American companies operate completely differently. Fourth, TNCs do not move alone, but are connected through complex 'production networks'. Finally, TNCs are powerful but not absolute. They are in a relationship of constant negotiation and checks with countries, trade unions, and civil society.


2. Something new and interesting

The most interesting part was, "Companies smell where they were born." I vaguely thought that global companies such as Google and Samsung would work similarly regardless of nationality. However, the author quotes Chagall as saying that companies, like people, have the essence and aroma of their country of origin. This means that unlike American companies that put shareholder interests first, Japanese and German companies still stick to their own unique ways. It was refreshing that globalization does not make everything the same, but rather that diversity is maintained.

Another is the analysis of 'power asymmetry'. Usually, it is said that companies are stronger than countries, but the author refutes this by citing the example of a Ford car. In the 1970s, Ford was able to speak up to the Spanish government, but when it recently entered the Chinese market, it was said that it was forced to follow the strict control of the Chinese government. In other words, it was quite convincing that the power of a company is relative and depends on the situation.


3. Questions and Discussions

The author argues that TNC did not have 'absolute power', but in reality, he thinks that the influence of big tech companies such as Apple and Amazon goes beyond individual countries. In particular, in tax avoidance or data monopoly issues, the state often does not control them properly, so can the state effectively regulate TNCs even in the digital age, as the author argues?

The author said that companies are "embedded" in their country of origin, but in recent years, the headquarters are moved to a country with low taxes or the management is formed multinational. Won't the concept of "nationality" of a company gradually fade in the future? Then, how can we hold companies socially responsible?

Comments

  1. seenzeDecember 12, 2025 at 2:33 AM

    Your discussion raises strong and timely questions about whether Dicken’s framework still holds in an era dominated by digital-platform giants like Apple, Amazon, and Google. You insightfully point out that while the author argues TNCs lack absolute power, big tech firms today often seem to exceed the regulatory capacity of individual states, especially in taxation and data governance. Your second question about the fading “nationality” of corporations is also important, as tax havens and multinational executive teams challenge the very notion of embeddedness. Overall, your discussion pushes the chapter’s arguments into contemporary debates and shows a clear ability to extend theory to current global issues.

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