LEC. 3: Economic Globalization

Who are the central actors shaping the global economy?

Transnational Corporations (TNCs).

Why is the “placeless global corporation” a myth?

TNCs remain embedded in national and local contexts despite global reach.

[Scale & Distribution of TNCs] Approximate number of TNCs worldwide (UNCTAD 2004)?

~61,000 with over 900,000 foreign affiliates.

[Scale & Distribution of TNCs] Share of global GDP contributed by TNCs?

About 10%, and one-third of world exports.

[Scale & Distribution of TNCs] How concentrated is TNC power?

Top 100 TNCs (<0.2% of all) account for 12–14% of global sales, assets, and employment.

[Why & How Firms Transnationalize] Two main motivations for TNC expansion?

• Market-oriented investment – reaching/serving foreign markets.

• Asset-oriented investment – securing resources or skilled labor.

[Why & How Firms Transnationalize] Three main modes of expansion?

• Greenfield investments – new facilities abroad.

• Mergers & acquisitions – buying existing firms.

• Strategic alliances/joint ventures – partnerships to share resources.

[Why & How Firms Transnationalize] What are “Born Globals”?

Firms that operate internationally from the start, often in knowledge-intensive sectors.

[Embeddedness of TNCs] Why are TNCs not truly “placeless”?

[Embeddedness of TNCs] Example of embeddedness?

Japanese vs. US electronics firms showing different regional production networks.

[Embeddedness of TNCs] What does the “varieties of capitalism” perspective argue?

Capitalism differs by culture and institutions; globalization modifies but doesn’t erase diversity.

[Transnational Production Networks] What are transnational production networks (TPNs)?

Webs of interdependent production, distribution, and consumption across countries.

[Transnational Production Networks] Four organizational types of TNCs (Bartlett & Ghoshal)?

• Multinational (decentralized, local autonomy)

• International (HQ-coordinated with adaptation)

• Global (centralized, standardized)

• Integrated network (interdependent resource-sharing)

[Transnational Production Networks] Why are most production networks regional, not global?

Efficiency and cultural/linguistic diversity make regional specialization more practical.

[Asymmetries of Power] Sources of TNC power?

Ability to exploit geographical differences, flexibility to relocate, and regulatory arbitrage.

[Asymmetries of Power] Limits to TNC power?

States, regulations, labor, civil society, and consumers contest their influence.

[Asymmetries of Power] Example of TNC–state bargaining?

Automakers in China facing strict state rules despite global power.

[Asymmetries of Power] How do labor and civil society influence TNCs?

Labor has weaker bargaining power (local immobility), while CSOs use global campaigns and consumer activism.

[Globalization & Consumer Culture] Does globalization create a global culture?

Scholars debate; if yes, it takes the form of consumer culture.

[Globalization & Consumer Culture] What is consumer culture?

A system where consumption = identity, lifestyle, and social status.

[Homegenization VS Heterogeneity] What is homogenization?

Spread of sameness (e.g., McDonald’s, Coca-Cola worldwide).

[Homegenization VS Heterogeneity] What is heterogeneity?

Local adaptation (glocalization), hybridization, and cultural diversity despite global flows.

[Homegenization VS Heterogeneity] Appadurai’s “scapes” framework?

Ethnoscapes, mediascapes, technoscapes, financescapes, ideoscapes.

[Homegenization VS Heterogeneity] How does globalization create “structures of common difference”?

Cultures express uniqueness within shared global formats (e.g., beauty pageants, global brands).

What is commodification of culture?

Turning cultural traditions and symbols into marketable products (e.g., folk motifs in mass-produced goods).