Blog Assignment 4: What is the relation between economy and globalization? - Kim Minji

 1) Summary

This article is about how transnational corporations (TNGs) affect economic globalization. As transnational corporations are increasingly influential today, it is becoming more important for us to understand the nature and importance of transnational corporations. The definition of transnational corporations began until 1914 by the transnationalization of manufacturing companies in the United States, the United Kingdom, and some continents of Europe, and the number of transnational corporations in the global economy has increased exponentially over the next 50 years. They are called giant corporations with no place to operate business around the world and are not loyal to a particular country or community. In fact, the forms and sizes of transnational corporations are very diverse in the global economy. Companies proceed with transnationalization in two broad categories: market-oriented investment and asset-oriented investment, and the size and characteristics of various markets and geographical non-uniformity of the markets support this. How a company develops transnational activities includes greenfield investment and strategic cooperation with other companies. The spread of these investments and alliances has greatly increased the complexity and diversity of operations of transnational corporations in the global economy. Multinational corporations are undoubtedly the main players in shaping the modern global economy, which inevitably has a significant impact on economic globalization in that they create tensions between other major players in the global economy, such as countries, communities, labor, consumers, and civil society organizations.

2) What I learned, something new, or something to think about
The story of the investment types of transnational corporations in economic globalization was interesting and new. I was aware that transnational corporations would be very sensitive to geographical fluctuations in labor costs, but I simply thought that companies would prefer cheap labor. However, with the exception of a few industries where cheap labor is important, other properties of human capital have become more important. The availability of highly educated, skilled, and motivated workers in quality communities is increasing. This situation currently supports a large portion of transnational investment in emerging market economies in East Asia, Eastern and Central Europe, and in some regions.
In addition, it was interesting to think that companies established themselves in the domestic market would advance overseas, but that such a process was not inevitable. In particular, in knowledge-intensive industries, companies started to establish overseas workplaces even if they were not necessarily large or dominant.

3) the point of discussion
As transnational corporations grow in influence around the world, there are concerns about them exerting power beyond countries. Their activities are often controversial as to how their business models affect society and the environment in relation to social responsibility. How can they be regulated and controlled?

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