Economic Globalization

1) Summarize in your own words of materials you read

 This article says the economic globalization around the TNC. This is focuses on five related issues.

 First, the scale and geographical distribution of TNCs in the global economy.

As essentially colonial and merchant capitalists, they created vast business empires at a world scale. And since 1914 the number of TNCs in the world economy has grown exponentially. In fact, TNCs come in all shapes and sizes, from the so-called global corporations operating in scores of countries to TNCs operating in only one or two countries outside their home base. So, in aggregate terms, TNC activity is conventionally measured using statistics on foreign direct investment (FDI). There is an increasing diversity of TNCs in the global economy.

 Second, why and how corporations engage in transnational activities.

The reasons why business firms extend their operations outside their home countries, and how they do that, are complex and highly contingent on particular circumstances. But, although there may appear to be a bewildering variety of reasons for TNC activity, we can boil these down to two broad categories (although the boundary between them is frequently blurred): market-oriented investment and asset-oriented investment. And There are two major ways in which firms develop transnational activities: one is through what is known as ‘greenfield’ investment; the other is through engagement with other firms, through either merger and acquisition or some form of strategic collaboration.

 Third, the geographical embeddedness of transnational corporations.
All business firms, including the most geographically extensive TNCs, are ‘produced’ through an intricate process of embedding in which the cognitive, cultural, social, political and economic characteristics of the national home base play a dominant part.

 Fourth, the ‘webs of enterprise’ manifested in transnational production networks.
 All business firms are constituted as, and embedded within, highly complex and dynamic networks of production, distribution and consumption. Such networks have become increasingly extensive geographically and controlled – or, at least, coordinated – primarily by transnational corporations.
 FIfth, the power relationships between TNCs and other actors in the global economy.