GE4202: REMAKING THE GLOBAL ECONOMY
1 August 2007
Lecturer: Professor
Henry Yeung
(Room:
AS2 03-04; Tel: 6874 6810; E-mail: HenryYeung@nus.edu.sg)
Homepage:
http://courses.nus.edu.sg/course/geoywc/henry.htm
Venue: Honours
Room
Time: Tuesday
9:30 a.m. Ð 12:30 p.m.
Seminars cancelled: Tuesday 28 August 2007; 6 November 2007
AIMS
To develop an in-depth
understanding of the key actors driving contemporary global economic change Ð
transnational corporations and nation-states.
To provide an advance
foundation for students planning to take up careers or postgraduate courses in
international business, regional and global studies and economic geography.
OBJECTIVES
By the end of the module, students should have a sound
understanding of:
The processes and development
of transnational activities by modern corporations;
The complex relationships that exist between transnational
corporations on the one hand and other institutions (e.g. nation states and
national firms) on the other as both seek to enhance their positions in a
highly competitive and volatile global economy;
The ways through which transnational corporations respond to
pressures of global economic restructuring and
The economic, social and political implications of
transnational corporation activities (and transnational production chains) in
specific national, regional and local contexts.
MODULE DESCRIPTION
This module examines the interrelationships between
transnational corporations (TNCs) and regional development in an era of global
economic change. The knowledge of TNCs and their cross-border operations is
indispensable to any serious attempt to understand the dynamics of the global
space-economy. In the Asia-Pacific rim, TNCs are major economic agents
spearheading economic development and social change at both national and
regional levels. TNCs also play a prominent role in different spheres
(production, consumption and exchange) and sectors (primary, secondary and
tertiary) of any regional economy. The module seeks to achieve a mixed blend of
theory and practice of TNCs and regional development. It provides students with
not only description and explanation of TNC operations, but also practical
knowledge in the analyzing the impact of TNCs on regional development. In
addition to regular readings, students are expected to conduct specific case
studies on the role of TNCs in regional development.
LECTURE AND SEMINAR PROGRAMME
The module comprises 11 three-hour seminars during
each Tuesday morning from Tuesday 14 August 2007 onwards. With the exception of the first and last two classes, each
session will comprise a one-hour introductory lecture, a one-hour seminar presentation
on a pre-arranged topic by selected members of the class, and a one-hour group
discussion.
The following is a list of lecture topics and assigned
readings for the class presentation.
Each student will take responsibility for preparing a research paper
(2,000 - 3,000 words) and presenting it at the end of the module. All students
are also expected to study the readings in advance of the class and present on
one assigned seminar topic. A list of readings is also given.
ASSESSMENT
The final mark will be derived from module work (50%)
and an end-of-semester examination (50%).
The module work will comprise:
1. Participation in seminar discussions (10%)
2. One seminar presentation (10%) and
3. One research paper to be presented during and
handed in after Lecture 10 (30%). You are required to complete a 3,000-word
case study on ÒThe global production/business networks of any major
transnational corporation from China, Hong Kong, Taiwan, South Korea, and
MalaysiaÓ of your own choice.
¥ Please note that the
paper should consist of a descriptive profile of the global operations by
any major TNC of your own choice. The TNC must have significant operations
in North America and/or Western Europe, apart from its home-based operations in Asia. It
should show how the investment strategies of the TNC have evolved over time and
how the TNCÕs global operations are organized.
¥ You are required to
explain and to assess the geographical organization of the global
production/business network of your chosen TNC by applying concepts and
theories from this module.
¥ The paper should not be merely a Òcompany historyÓ
written as an isolated case study, but should rather be set firmly within the broader
context of
global competition.
¥ Please inform me your
choice of TNCs by Tuesday 25 September 2007. No two persons are allowed
to write on the same TNCs. So book it as soon as possible with me. The deadline for submission
is Sunday 11 November 2007.
COURSE OUTLINE
¥ Introduction: changing global map of transnational
corporations and foreign direct investment (14 August 2007)
¥
Competing theoretical perspectives on TNCs and regional development (21
August and 4 September 2007)
¥ Strategies of TNCs in global competition (11
September 2007)
¥ The internationalization of nation states (18
September 2007)
¥ The political economy of triangular diplomacy:
TNC-state relationship (2 October 2007)
¥ Gaining national competitive advantage: the
globalization of Asian TNCs (9 October 2007)
¥ TNCs and states in local and regional
development (16 October and 23 October 2007)
¥ Presentation of research papers (30 October
2007)
¥ Conclusion (13 November 2007)
Context of the Module: Firms and States in Global
Competition
A tendency since the late 1980s and the early 1990s in
international business and political economy has been the growing
interdependence between the state and the transnational corporation (TNC). This
growing interdependence has been defined as Òthe rivalry between states and the
rivalry between firms for a secure place in the world economyÓ (Stopford and
Strange, 1991: 1). The relation between the state and the firm is no longer a
one-way process. It has grown into triangular relationships and diplomacy along
the state-TNC nexus: (1) state-state; (2) state-TNC and (3) TNC-TNC. The
increasingly complex relationships between the state and the TNC have prompted
many host governments to reconsider their concerns when negotiating with TNCs.
The concern of governments varies with the type of TNCs with which they are
negotiating. In general, there are two trends that draw growing attention from
government authorities. The first trend is increasing global interdependence: Governments are particularly
concerned whether they will lose their competitiveness and power in the
interdependent global economy. Their main concerns are namely (1) the equity
and efficiency of adjustment processes in declining industries; (2) the
development of new industries for strategic reasons; and (3) the specialization
of national economies.
In today's interdependent global economy, the fate and
prospect of industries in one country or region is often intertwined with
industries in another country or region. Technological development in advanced
industrialized economies, for example, has reduced the need for primary
products in the production processes. This results in the decline of
traditional industries such as mining and plantations in many Southeast Asian
countries. Many of these Southeast Asian countries have since learnt to adjust
to this process of global shift in production processes and consumption
patterns. Their main concern is to remain competitive in the global economy
and, yet, to capture value-added activities mainly through the local presence
of foreign investments. Malaysia and Thailand are good examples as
reform-minded governments have been consciously attracting foreign investors
and TNCs, particularly those in electronics sector, to pull the economy out of
declining industries. Another concern for many natural resources-poor countries
is to develop new industries for strategic reasons. To capture greater
value-added activities and to share the success of the global economy, many
countries begin to develop strategic plans for their industrialization processes.
Singapore is well known for its consistent drive towards high-tech and
information-intensive industrialization. Today, the clustering of many leading
world-class electronics, chemicals, and biomedical science manufacturers and
their research and development facilities in the city-state testifies the
success of such a strategy in attracting TNCs. A final concern of governments
is related to specialization and hence trade. Countries in the Asia-Pacific
region, in particular those newly industrialized economies (NIEs), have long
realized that import-substitution is not an ultimate solution to economic
underdevelopment. They instead have relied on export-oriented platform to
economic growth and development. To be a successful export-oriented economy, one
must specialize in order to capture comparative advantages that maximize the
skill and resource endowments of a particular country. Singapore, for instance,
offers a strong comparative advantage in human resources, whereas natural
resources sustain the comparative advantage of Indonesia. Both countries
specialize in different industries to gain from international trade and, more
recently, foreign direct investment.
On the other hand, governments are also driven by the
second structural trend Ð growing global competition. Their response varies
according to the nature of TNCs. If they are concerned with global competition
without the presence of TNCs, the tendency is to regulate the extent and speed
of exposing national producers and markets to international competition (e.g.
Taiwan and South Korea). If multi-domestic TNCs are preferred and discrete
subsidiaries are maintained by these TNCs, a minimum regulation is enforced
(e.g. Singapore). Sometimes, host country governments are overpowered by global
TNCs having worldwide operations. Integrated TNCs are likely to have
substantial bargaining power so that there is a transition from regulation to
negotiation in the attitude of government authorities.
This course is structured to reflect these dynamic
trends and strategies in the global economy.
¥ First, it focuses on
the internationalization of firms and states and their strategies in global
competition.
¥ Second, it examines the
works of nation states in promoting a more congenial relationships with TNCs and
in gaining sustainable national competitive advantages.
¥ Third, it discusses
local/regional development initiatives and the role of TNCs in regional
development.
Standard Texts
Each of you is expected to
have read and be familiar with the following texts. They are essential to the course and the
examination.
Dicken,
Peter (2007), Global Shift: Mapping the Changing Contours of the World
Economy,
Fifth Edition, London: Sage.
Peck, Jamie and Yeung, Henry
Wai-chung (eds.) (2003), Remaking the Global Economy: Economic-Geographical
Perspectives, London: Sage.
The following websites contain
very useful information to this module:
1. United Nations Conference on Trade and Development:
data on TNCs and FDI (http://www.unctad.org)
2. Organisation for Economic Cooperation and
Development: data on various economies
3. APEC Investment Mart
4. Global Production Networks Project Website: http://www.art.man.ac.uk/Geog/gpn
DETAIL LECTURE OUTLINE
Lecture 1. Introduction: changing global map of
transnational corporations and foreign direct investment (14 August 2007)
* Dicken, Peter
(2007), Global Shift, Chapters 1-2.
United Nations
Conference on Trade and Development (2006), World Investment Report 2006: FDI from Developing and Transition
Economies: Implications for Development, New York: United Nations, Chapters 1-2. Website: http://www.unctad.org/wir (WIR 2007
is due in October 2007).
Lectures
2-3. Competing theoretical perspectives on TNCs and regional development
(21 August
and 4 September 2007)
* Dicken, Peter
(2007), Global Shift, Chapters 3-5.
* Dunning, John H. (2006), ÔTowards a new paradigm of
development: implication for the determinants of international business
activityÕ, Transnational Corporations,
Vol.15(1), pp.173-227.
* Yeung, Henry
Wai-chung (ed.) (2007), Handbook of
Research on Asian Business,
Cheltenham: Edward Elgar, Chapters 2-3 by Delios et al. and Peng.
* Gereffi, Gary (2005), ÔThe global
economy: organization, governance, and developmentÕ, in Neil J. Smelser and
Richard Swedberg (eds.), The Handbook of Economic Sociology, 2nd ed. Princeton, NJ: Princeton University Press, pp.160-82.
* Henderson,
Jeffrey, Dicken, Peter, Hess, Martin, Coe, Neil and Yeung, Henry Wai-chung
(2002), ÔGlobal production networks and the analysis of economic developmentÕ, Review
of International Political Economy, Vol.9(3),
pp.436-64.
Buckley, Peter J. and Ghauri, Pervez (2004),
ÔGlobalisation, economic geography and the strategy of multinational
enterprisesÕ, Journal of International Business Studies, Vol.35(2), pp.81-98.
Dicken, Peter, Kelly, Philip,
Olds, Kris and Yeung, Henry Wai-chung (2001), ÔChains and networks, territories
and scales: towards an analytical framework for the global economyÕ, Global
Networks,
Vol.1(2), pp.89-112.
Gereffi, Gary, Humphrey, John and
Sturgeon, Timothy (2005), ÔThe governance of global value chainsÕ, Review of
International Political Economy,
Vol.12(1), pp.78-104.
Hess, Martin
and Yeung, Henry Wai-chung (2006), ÔWhither global production networks in economic
geography? Past, present and futureÕ, Environment and Planning A, Vol.38(7),
pp.1193-1204.
Ietto-Gillies, Grazia (2005), Transnational Corporations
and International Production: Concepts, Theories and Effects, Cheltenham: Edward Elgar.
Ricart, Joan Enric, Enright, Michael J.,
Ghemawat, Pankaj, Hart, Stuart L. and Khanna, Tarun (2004), ÔNew frontiers in international strategyÕ, Journal
of International Business Studies,
Vol.35(3), pp.175-200.
Rugman, Alan and Verbeke, Alain (2004),
ÔA perspective on regional and global strategies of multinational enterprisesÕ,
Journal of International Business Studies, Vol.35(1), pp.3-18.
Lecture 4.
Strategies of TNCs in global competition (11 September 2007)
Lecture: What
are the challenges facing TNCs in an era of global competition? What are their
strategies to achieve a win-win situation? What are the geographical outcomes
of such strategies?
Readings: *
Dicken, Peter (2007), Global Shift, Chapters 9-14.
*
Coe, Neil M., Kelly, Philip F. and Yeung, Henry W.C. (2007), Economic
Geography: A Contemporary Introduction, Oxford: Blackwell, Chapter 8.
Coe,
Neil M. and Lee, Yong-Sook (2006), ÔThe strategic localization of transnational
retailers: the case of Samsung-Tesco in South KoreaÕ, Economic Geography, Vol.82(1), pp.61-88.
Peck and Yeung (eds.) (2003), Remaking the Global
Economy, Chapters by Gertler and Schoenberger.
Jansson, Hans (2007), International Business
Strategy in Emerging Country Markets: The Institutional Network Approach, Cheltenham: Edward Elgar.
Mirza,
Hafiz (ed.) (1998), Global Competitive Strategies in the New World Economy:
Multilateralism, Regionalization and the Transnational Firm, Cheltenham: Edward Elgar,
Chapters 2, 4, 10 and 20.
Pearce, Robert D. (2006), ÔGlobalization and
development: an international business strategy approachÕ, Transnational
Corporations, Vol.15(1), pp.39-74.
Wang, Jason H.J. and Yeung,
Henry Wai-chung (2000), 'Strategies for global competition: transnational
chemical firms and SingaporeÕs chemical cluster', Environment and Planning A, Vol.32(5), pp.847-69.
Yeung, Henry Wai-chung, Poon,
Jessie and Perry, Martin (2001), ÔTowards a regional strategy: the role of
regional headquarters and regional offices in the Asia PacificÕ, Urban
Studies,
Vol.38(1), pp.157-83.
Video: Multinational
Enterprises and the End of Global Strategy (Australian Centre for International
Business), Call No: HVC1500 (c. 2000 and 40 minutes)
Seminar topic:
What is the nature of global competition and its impact on the strategies of
transnational corporations?
Lecture 5. The internationalization of nation
states (18 September 2007)
Lecture: What
are the pressures faced by nation states in today's globalized economy? How do
they respond to these pressures? What are different forms and functions of
nation states?
Readings: *
Dicken, Peter (2007), Global Shift, Chapters 6-7.
* Coe, Neil M., Kelly, Philip
F. and Yeung, Henry W.C. (2007), Economic Geography: A Contemporary
Introduction,
Oxford: Blackwell, Chapter 7.
Peck and Yeung (eds.) (2003), Remaking the Global
Economy, Chapters by Tickell and Peck, Brenner and Hudson.
Jones, Martin R.
and Jones, Rhys (2004), ÔNation states, ideological power and globalisation:
can geographers catch the boat?Õ. Geoforum, Vol.35(4), pp.409-24.
McGrew,
Anthony G. (1998), 'The globalization debate: putting the advanced capitalist
state in its place', Global Society, Vol.12(3), pp.299-321.
Gritsch, Maria (2005), ÔThe nation-state and economic
globalization: soft geo-politics and increased state autonomyÕ, Review of
International Political Economy,
Vol.12(1), pp.1-25.
Peet, Richard
(2007), Geographies of Power: Making Global Economy Policy, London: Zed
Books.
Seminar topic:
Critically evaluate the role of nation states in governing today's world
economy.
Lecture 6. The political economy of triangular
diplomacy: TNC-state relationship
(2 October 2007)
Lecture: What
is the relationship between firms and nation states in global competition? How
do firms interact with nation states to gain competitive advantages over their
rivals? How do nation states attract and/or help national firms to compete in
the regional and global marketplace?
Readings: *
Dicken, Peter (2007), Global Shift, Chapter 8.
*
Yeung, Henry Wai-chung (ed.) (2007), Handbook
of Research on Asian Business,
Cheltenham: Edward Elgar, Chapters 12-14 by Dent, Phelps, and Giroud.
Doremus, Paul N., Keller,
William W., Pauly, Louis W. and Reich, Simon (1998), The Myth of the Global
Corporation,
Princeton, NJ: Princeton University Press.
Kobrin, Stephen J. (2001), ÔSovereignty@bay:
globalization, multinational enterprise, and the international political
systemÕ, in Alan M. Rugman and Thomas L. Brewer (eds.), Oxford Handbook of
International Business, Oxford:
Oxford University Press, pp.181-205.
Peck and Yeung (eds.) (2003), Remaking the Global
Economy, Chapters by Dicken and Glasmeier and Conroy.
Phelps,
Nicholas A. and Raines, Philip (eds.) (2003), The New Competition for Inward
Investment: Companies, Institutions and Territorial Development, Cheltenham: Edward Elgar,
Chapters 3-5, 10-11.
Seminar topic:
Discuss the complex bargaining and embedded relationships between transnational
corporations and nation states.
Lecture 7. Gaining national competitive advantage:
the globalization of Asian TNCs
(9 October 2007)
Lecture: What
is the role of the state in creating and sustaining national competitive
advantage? How do national firms develop in Asian newly industrialized
Economies? What are the various forms of capitalist development in Asian NIEs?
Readings: *
Yeung, Henry Wai-chung (2007), ÔFrom
followers to market leaders: Asian electronics firms in the global economyÕ, Asia
Pacific Viewpoint, Vol.48(1), pp.1-25.
*
United Nations
Conference on Trade and Development (2006), World Investment Report 2006: FDI from Developing and Transition
Economies: Implications for Development, New York: United Nations, Chapters 3-4.
Mathews, John A. (2002), Dragon
Multinational: A New Model for Global Growth, Oxford: Oxford University Press.
Poon, Jessie, Hsu, Jinn-Yuh and Suh, Jeongwook (2006),
ÔThe geography of learning and knowledge acquisition among Asian latecomersÕ, Journal
of Economic Geography, Vol.6,
pp.541-59.
Sim,
A.B. and Pandian, J. Rajendran (2003), ÔEmerging Asian MNEs and their
internationalization strategies Ð case study evidence on Taiwanese and
Singaporean firmsÕ, Asia Pacific Journal of Management, Vol.20(1), pp.27-50.
Yeung,
Henry Wai-chung (ed.) (1999), The Globalisation of Business Firms from
Emerging Economies, Volume 1, Cheltenham: Edward Elgar, Introduction.
Yeung,
Henry Wai-chung (2002), Entrepreneurship and the Internationalisation of
Asian Firms: An Institutional Perspective, Cheltenham: Edward Elgar, Chapter 3.
Yeung,
Henry Wai-chung (ed.) (2007), Handbook
of Research on Asian Business,
Cheltenham: Edward Elgar, Chapters 20-22 by Tolentino, Pananond, and Wu.
Seminar topic:
Explain the globalization of transnational corporations from Asian developing
economies.
Lectures 8-9. TNCs and states in local and regional
development (16 October and 23 October 2007)
Lecture: What
are the changing forms of firm activities in local and regional economic
development? What is the role of TNCs in local and regional development in an
era of globalization?
Readings: *
Dicken, Peter (2007), Global Shift, Chapters 15-18.
*
Coe, Neil, Hess, Martin, Yeung, Henry Wai-chung, Dicken, Peter and Henderson,
Jeffrey (2004), ÔÓGlobalizingÓ regional development: a global production
networks perspectiveÕ, Transactions of the Institute of British Geographers, New Series, Vol.29(4),
pp.468-84.
*
United Nations Conference on Trade and Development (2006), World Investment
Report 2006: FDI from
Developing and Transition Economies: Implications for Development, New York: United Nations,
Chapters 5-6.
Bhagwati, Jadesh (2007),
ÔWhy
multinationals help reduce povertyÕ, The World Economy, Vol.30(2),
pp.211-228.
Giroud,
Axele (2003), Transnational Corporations, Technology and Economic
Development: Backward Linkages and Knowledge Transfer in South-East Asia, Cheltenham: Edward Elgar,
Chapters 3-4.
Liu, Weidong and Dicken, Peter (2006), ÔTransnational corporations and Òobligated embeddednessÓ:
foreign direct investment in ChinaÕs automobile IndustryÕ, Environment
and Planning A, Vol.38(7), pp.1229-247.
Phelps,
Nicholas A. and Fuller, C. (2000), ÔMultinationals, intracorporate competition,
and regional developmentÕ, Economic Geography, Vol.76(3), pp.224-43.
Tokatli, Nebahat (2007), ÔAsymmetrical power
relations and upgrading among suppliers of global clothing brands: Hugo Boss in
TurkeyÕ, Journal of Economic Geography, Vol.7(1), pp.67-92.
Yeung, Godfrey (2001), Foreign
Investment and Socio-Economic Development in China: The Case of Dongguan, Basingstoke: Palgrave.
*
Yeung, Henry
Wai-chung, Liu, Weidong and Dicken, Peter (2006), ÔTransnational
corporations and network effects of a local manufacturing cluster in mobile
telecommunications equipment in ChinaÕ, World
Development, Vol.34(3),
pp.520-40.
Zhou,
Yu and Tong, Xing (2003), ÔAn innovative region in China: interaction between
multinational corporations and local firms in a high-tech cluster in BeijingÕ, Economic
Geography,
Vol.79(2), pp.129-52.
Seminar topic
1: With reference to specific examples, discuss the spatial dimensions of TNC
impact.
Seminar topic
2: With reference to specific examples, assess the relevance of TNCs for local
and regional development.
Lecture 10. Presentation of research papers (30
October 2007)
Lecture 11. Conclusion (13 November 2007)
Readings: *
Dicken, Peter (2007), Global Shift, Chapter 19.
Dicken, Peter
(2004) ÔGeographers and ÒglobalizationÓ: (yet) another missed boat?Õ, Transactions
of the Institute of British Geographers, Vol.29(1), pp.5-26.
Video: Globalization (Debra Film for NBV Sweden),
Call No: CVC13330 (c. 2002 and 28 minutes)