Economic globalization

1.Summary

 

Like we studied from our class in this semester, the whole world are becoming more and more interdependent. Globalization is now running in the political section, cultural section and also in economic section. It is definitely the most powerful influences of all the shape of many globalization form. Economic influences are very obvious to each individual. In 16th century, there are the first transnational corporation as a matter of fact, such as the East India Company and the Hudson’s Bay Company. They actually initiate the global trading and service like the one of today’s. But after them, there were no companies like them untill the 20th century. In 1914, there are created many global companies. After World War 1, many other corporations were roused and became more popular and their influences over the whole world became stronger. Currently, Transnational corporation as a firm that has the influence over the world has been created. Many firms has been became transnational. It is very complex to explain why they developed. We can classify the phenomenon about two categories. It is ‘Market-oriented investment’ and ‘Asset-oriented investment’. There are two major ways that corporations control the transnational activities. First, there is investment. People or corporations invest their profit to the uprising company. It is called Greenfield investment. Second, Corporations merge or collaboration as a engagement. Greenfield investment can name as a new facility. They build a factory to distribute some part of stock to do their task. Next, many transnational Corporation do Engagement with other corporations to go abroad.

TNC is the most important facter that runs the economic globalization nowadays. As we studied already, the world is becoming more and more interdependent and complex. In modern society, corporation never exist just alone. Nowadays, TNC is connecting to even local town and nations. In these sense, TNC became to have a power within the global world. Tha basis of power of TNC lies in the potential ability to take advantage of geographical differences in the availability and cost of law materials or resources in state policies. But, the power of TNC causes very hasty generalizations because it does not mean the TNC always have positive side. It may creates the inequality of global economic distribution of power

2. Interesting thing I learned

 

I learned about the brief history of TNC. I thought that TNC is only matter of things between country to country. But actually, TNC are connected to the local town and even nations. So TNC’s scale is much bigger than I thought. In globalized world, the role of TNC will be much more important Because of their influences over the whole world. TNC have to consider the side effects of global economy and then appreciate their role inside the global economy.

3.Discussion point

 

After reading this article, I think the power of globalization is really strong. Especially, the economic factors are very close to each people like me. Everything around us has affected by the economy. In this sense, the emerge of the TNC is maybe causes some problem to the local economy. There is a term called economy of scale. TNC’s scale is very huge so it’s influences are much more broad. TNC may control the local economy by trade. Or, maybe, TNC could put the local small corporation into danger. How do you think about the side effects of TNC?