Table Of ContentTRANSNATIONAL CORPORATIONS AND THE
GLOBAL ECONOMY
UNU WORLD INSTITUTE FOR DEVELOPMENT ECONOMICS
RESEARCH (UNU/WIDER) was established by the United Nations
University as its first research and training centre and started work in
Helsinki, Finland, in 1985. The purpose of the Institute is to undertake
applied research and policy analysis on structural changes affecting the
developing and transitional economies, to provide a forum for the
advocacy of policies leading to robust, equitable and environmentally
sustainable growth, and to promote capacity strengthening and training in
the field of economic and social policy-making. Its work is carried out by
staff researchers and visiting scholars in Helsinki and through networks of
collaborating scholars and institutions around the world.
UNU World Institute for Development Economics Research (UNU/WIDER)
Katajanokanlaituri 6 E, F1N-OOI60 Helsinki, Finland
Transnational
Corporations and the
Global Economy
Edited by
Richard Kozul-Wright
UN Conference on Trade and Development
Geneva
and
Robert Rowthorn
University of Cambridge
for the United Nations University/World Institute for
Development Economics Research
Foreword by Giovanni Andrea Cornia
•
~~ The United Nations
~ University
WIDER
World Institute for Development
Economics Research
First published in Great Britain 1998 by
MACMILLAN PRESS LTD
Houndrnills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-26525-1 ISBN 978-1-349-26523-7 (eBook)
DOI 10.1007/978-1-349-26523-7
First published in the United States of America 1998 by
ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. lOOIO
ISBN 978-0-312-17724-9
Library of Congress Cataloging-in-Publication Data
Transnational corporations and the global economy / edited by Richard
Kozul-Wright and Robert Rowthorn.
p. cm.
A collection of papers "originally presented at a conference
sponsored by WIDER at King's College, Cambridge, in September 1995"
-Pref.
Includes bibliographical references and index.
ISBN 978-0-312-17724-9 (cloth)
I. International fmance-Congresses. 2. International business
enterprises-Finance-Congresses. 3. Investment, Foreign
-Congresses. I. Kozul-Wright, Richard, 1959- II. Rowthom, Bob.
HG388l.T6533 1997
332'.042-DC21 97-22917
CIP
© The United Nations UniversitylWorld Institute for Development Economics Research 1998
Softcover reprint of the hardcover 1st edition 1998 978-0-333-68957-8
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sustained forest sources.
10 9 8 7 6 5 4 3 2 I
07 06 05 04 03 02 01 00 99 98
Contents
Foreword vii
Notes on Contributors viii
Introduction: Transnational Corporations and the Global
&oo~ 1
Richard Kozul-Wright, UNCTAD, Geneva, Switzerland and
Robert Rowthorn, University of Cambridge, UK.
I Globalization in Perspective
Chapter 1 Globalization Myths: Some Historical Reflections
on Integration, Industrialization and Growth in the
World Economy 37
Paul Bairoch and Richard Kozul-Wright
Chapter 2 Globalization and its Limits 69
William S. Milberg
Chapter 3 Multinational Corporations: An Historical
Account 95
Mira Wilkins
Chapter 4 Transnational Service Corporations in the Process
of Globalization 134
Pascal Petit
Chapter 5 Direct Foreign Investment, Transnational
Corporations and Growth: Some Empirical
Evidence and a North-South Model 164
Amitava Krishna Dutt
II Transnational Corporations, the State and
Economic Development
Chapter 6 Transnational Corporations and Third World States:
From the Old Internationalization to the New 195
Peter Evans
v
VI Contents
Chapter 7 Transnational Corporations and Strategic Industrial
Policy 225
Ha-Joon Chang
Chapter 8 Transnational Corporations and the Nation State 244
Mica Panic
III Lessons from Recent Experience
Chapter 9 New Trends in Japanese Trade and FDI:
Post-Industrial Transformation and Policy
Challenges 279
f ilmaz Akyiiz
Chapter 10 Internationalization of Industrial Firms:
Implications for Growth and Industrial Structure
in the Nordic Countries 318
Pontus Braunerhjelm, Per Heum and
Pekka f/a-Anttila
Chapter 11 Transnational Corporations in Central and
Eastern Europe and in the Former Soviet Union:
A Return or a New Beginning? 346
Mihaly Simai
Chapter 12 International Trade, Outsourcing and Labour:
A View from the Developing Countries 373
Edward Amadeo
Chapter 13 Mexico's TNC-centric Industrialization Process 401
Michael Mortimore
Index 431
Foreword
Whether or not one agrees with the old Chinese proverb about living
through interesting times, it is certainly the case that change in the
world economy has both accelerated over the past two decades and
experienced more qualitative transformations. Some of these changes,
such as the collapse of communism, have been very dramatic. Others,
such as the growing influence of the East Asian economies, have only
become visible over the course of a number of decades. At the same
time other features of the world economy, such as the struggle across
much of the developing world to create a viable industrial base, the
challenges of poverty alleviation, and the threat of famine have per
sisted with little sign of significant change. Since its founding,
UNU/WIDER has been at the cutting edge of research into all of these
areas. However, and despite a growing interest among academics and
policy makers, changes in the structure of international production and
the expanding role of transnational corporations (TNCs) have not figured
in great detail in the Institute's research programme. This book seeks
to fill that gap. Moreover, it aims to do so with a very specific intent.
Although a vast literature has now grown up around the changing
role of TNCs in the world economy, much of it has failed to engage
with the broad issues of economic development, which have been
UNU/WIDER's traditional concern.
This book brings together papers written by representatives from
UN agencies and academics. These papers - first presented at a
UNU/WIDER conference held in Cambridge in September 1995 - deal
with such issues as the nature and extent of globalization, the changing
role of transnational corporations in the world economy, and the op
portunities and obstacles facing national policy makers in the rapidly
changing global economy. This is a very original set of papers which
I strongly recommend to the academics.
Giovanni Andrea Cornia
Director
UNUlWIDER
vii
Notes on Contributors
Ylimaz Akyiiz, UNCT AD Geneva, Switzerland.
Edward Amadeo, PUC-Rio, Brazil.
Paul Bairoch, University of Geneva, Switzerland.
Pontus Braunerhjelm, lUI, Stockholm, Sweden.
Ha-Joon Chang, University of Cambridge, UK.
Amitava Krishna Dutt, University of Notre Dame, USA.
Peter Evans, University of California, Berkeley, USA.
Per Heum, SNF, Bergen, Norway.
Richard Kozul-Wright, UNCTAD, Geneva, Switzerland.
William Milberg, New School for Social Research, USA.
Michael Mortimore, ECLAC, Santiago, Chile.
Mica PaniC, Selwyn College, University of Cambridge, UK.
Pascal Petit, CEPREMAP/CNRS, Paris, France.
Mihaly, Simai, UNU-Wider, Helsinki, Finland.
Mira Wilkins, Florida International University, USA.
Pekka Ylii-Anttila, ETLA, Helsinki, Finland.
viii
Introduction: Transnational
Corporations and the Global
Economy
Richard Kozul-Wright and Robert Rowthom
GLOBALIZATION - DEFINITIONS AND DISAGREEMENTS
There is a growing consensus that the approaching millenium is not
only a notable event in calendar time but also marks a profound his
torical turning point ending a distinct era of capitalist development. At
the centre of this consensus is the concept of globalization, which over
the course of the past decade, has moved from the fringes of develop
ment discourse to become the lingua franca of social scientists, politi
cians, journalists and business consultants across both the developed
and developing worlds.
I
While the diversity of voices attracted to globalization has made it
difficult to construct a simple and satisfactory definition, the increas
ing volume of cross-border interactions and resource flows provides a
common reference point. In addition, although it is recognized that
such interactions can involve social and cultural exchanges, it is in
relation to economic activities that the idea of globalization has at
tracted most interest. Consequently, economic actors, such as transnational
corporations (TNCs) and international financial institutions, are seen
as providing the organizational key to the future direction of the
globalization process and its impact. This institutional dimension pro
vides another point of reference.
The mounting interest in globalization has been caught up with two
other developments which, on some accounts, can explain not only the
rising volume of international transactions but also account for the
more qualitative changes in the world economy associated with
globalization. The first development concerns the emergence of new
technologies associated with the collection, transmission and process
ing of information. According to Christopher Freeman (1989), this rep
resents a new technological paradigm which has not only given rise to
1
