What is the relation between economy and globalization? – Park gyeonggyun

 


1) Summary

Peter Dicken’s reading explains the misconceptions and realities surrounding transnational corporations (TNCs). While TNCs are widely regarded as extremely important actors in the global economy, the author argues that the common perception of them as being more powerful than nation-states is exaggerated. He criticizes this view for oversimplifying the reality of how TNCs actually operate.

Most transnational corporations continue to concentrate the majority of their activities in their home countries, and their overseas operations are often more limited than people assume. In other words, TNCs are not uniformly global corporations spread evenly across the world; rather, they are organizations whose activities remain centered in their home countries while operating in diverse forms across different nations.

The author also explains that there are several reasons why TNCs expand abroad, which can largely be divided into market expansion and asset acquisition. Through overseas expansion, firms are able to strategically utilize assets that are unevenly distributed across regions and gain access to important forms of human capital.

Furthermore, Dicken emphasizes that transnational corporations are not free from the influence of place. This means that TNCs are not “stateless” entities; instead, the culture and institutions of their home countries continue to shape their behavior. Ultimately, although TNCs exert significant influence over the global economy, they do not possess absolute power. Rather, they hold relative power and are constrained by negotiations with states and international regulatory frameworks.

 

2) What I Learned from the Reading

In order to write this blog post, I first looked up the definition of a transnational corporation. I learned that a TNC is a company that operates across national borders, with its headquarters located in one country while maintaining factories, research centers, or branches in other countries. Thinking of Samsung Electronics as an example made this concept much easier to understand.

After understanding this definition, I found it somewhat surprising that some people consider transnational corporations to be stateless. When thinking about companies such as Samsung, whose headquarters are clearly in South Korea, or Starbucks, whose headquarters are in the United States, their national origins seem quite obvious.

I also found myself naturally agreeing with the argument that transnational corporations do not hold more power than nation-states. However, I do agree that TNCs can still exert significant influence on state power. Finally, through this reading, I gained a clearer understanding of why transnational corporations seek to expand overseas and how they shape the global economy. Factors such as the utilization of unevenly distributed assets, avoidance of tariffs, recruitment of talent, and acquisition of technology helped me view global economic dynamics from a broader perspective.

 

3) Concerns and Questions for Discussion

Although transnational corporations do not possess absolute power, I am curious about the extent of the power they do hold. Specifically, when a transnational corporation with its headquarters in a particular country gains significant influence, I wonder to what extent the state is willing to protect that corporation and at what point it begins to regulate or restrain it. I am also interested in understanding where this boundary is drawn.

For example, companies such as Samsung and LG are often seen as major transnational corporations that drive the South Korean economy. While they may not hold absolute power, it is reasonable to assume that their collapse would cause serious damage to the national economy. This raises the question of how the state balances supporting their growth while simultaneously preventing monopolistic behavior. At what point does the government shift from cooperation to regulation? This tension between support and control seems to be an important issue worth discussing.

3) AI using

I used gpt for translation.

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