The TNC Project
The Encountering of Local and Global:
Assessing the Impact of TNCs on Their Host Economies in the Global Periphery
Background: The rise and spread of transnational corporations or TNCs is a defining feature of contemporary globalization. Although theoretically, TNCs can inject capital into the host economy, stimulate the learning and upgrading of local firms, and create ‘good jobs’, none of these shall be taken for granted. In reality, it all depends. Exploiting local labor, depleting local resources, forcing local firms to be stuck in low value-added activities, and degrading the local environment by the TNCs, especially in the global periphery, are equally possible and frequently observed. Therefore, economic and social upgrading of the local economy/community through embracing TNCs cannot be taken for granted, and downgrading is equally possible. Or more complicated, upgrading and downgrading may take place simultaneously in different spheres.
A TNC’s transnationalization may be for the purpose of seeking market access, sourcing efficiency, or other reasons. Relatedly, a TNC and its host economy can be engaged in several different ways, through direct investment, merger, acquisition, and outsourcing/subcontracting, etc. Both a TNC and its host economy/state possess certain ‘power resources’ affecting their relative bargaining power; also, both parties operate within certain constraints restricting the exercise of such power resources (Dicken 2015: 242-248). The bargaining process is dynamic and contingent, thus there is no unambiguous and totally predictable outcome. It should be empirically examined rather than presumed.
Typically, the TNC’s engagement with the local economy can involve a number of key actors: the lead firm (TNC), local firms, local state(s), local workers and their organizations (e.g., labor unions), the local community, NGOs, and so on. The context-specific combination and interaction of these actors will add to the local uniqueness and complexity of the ‘local/global encountering’. The local income level, labor condition, resource endowment, market size, state policy, and bureaucratic integrity can all be important here. As workers rights groups, environmentalists and ethical sourcing projects have begun to monitor TNC commodity chains and production networks more closely, the relationship between TNCs and their host economies has also been changing accordingly and thus needs to be studied from a dynamic perspective.
It is necessary to be clear that a local economy becomes a host economy to a TNC only when the TNC has certain kind of foreign direct investment (FDI) in that economy, i.e., the TNC should at least have a subsidiary, branch office, or joint venture in operation in the local economy. For example, in the case of Foxconn’s iPhone factories in mainland China, here mainland China is the host economy of the TNC Foxconn, not Apple. Although Foxconn provides manufacturing services to Apple, but that is through a subcontracting arrangement; Apple has no FDI in manufacturing in mainland China.
Assignment Goal: In this assignment, you are expected to study one chosen TNC, with a focus on the TNC’s interaction with, and impact on, one of its host economies in the global periphery, i.e., localities outside of North America and Western Europe. The interaction between the TNC and its host economy should be a particular period during the last four decades. There are two elements that you will need to submit: the topic choice and the full paper.
1) Topic Choice (10%) (due Feb. 8, 6pm)
Submit a one-page outline including:
- your chosen TNC;
- its host economy (with the TNC’s FDI);
- at least two academic sources (relevant to your study, but may not be directly related to your TNC), and
4) a statement of (tentative) argument/focus.
This first step involves some preliminary research and thinking about your TNC project. I can imagine many possible choices, however, your selection should be informed by the following ‘structural constraints’:
1) you will want a TNC and one of its host economies in the global periphery (a city, region, or country) that you are genuinely interested in,
2) you can find sufficient data sources (including some academic ones) to analyze their interactions, and
3) you can develop an interesting and relevant argument in some general/theoretical terms (such as global production and poverty reduction) based on the empirical materials.
One paragraph should be sufficient for your statement ofargument/focus. It should be a brief description of your topic ideas that can be tentative. You are not expected to have done much detailed research about it at this stage. Your ideas may change later based on our feedback, along with more exposure to pertinent materials and having additional time to think through your ideas. Nevertheless, the chosen topic should be one that you have given some serious investigation and deliberation that you are willing to commit to as your final topic. You also should try to demonstrate some effort at forecasting the theoretical links to the course materials.
Don’t assume that you can be working with one topic for the first seven weeks of the class, and then hand in a final paper on a completely different topic. A sudden switch in topic would make your final paper “unacceptable” without prior agreement from the instructor. The whole point of this three-stage approach is to provide you with useful feedbacks during the development of your argument. If you experience any difficulty along the way, arrange to talk to the TA/instructor, and we will do our best to help you out.
In addition to a descriptive account of the behavior, or key activities, of the TNC in its host economy, the focus of your final paper should be centered on a critical assessment of the TNC’s behavior in its host economy: positive, negative, or some nuanced mix of both, probably shadowed by uncertainty. You are also expected to relate your findings to the theoretical perspectives discussed in our course materials. A general descriptive paper on “TNC X” or “activities of TNC X in region Y” is unacceptable, and you should be arguing something more interesting and specific than “Corporation X is good/bad for Y’s economy”. Your final essay should present a sufficiently specific argument and try to engage the course materials (i.e., working with and citing key sources from the course required and suggested reading list as theoretical references).
To help you think up possible ideas, look over the reading list and skim some of the sources listed there to get a better idea of which directions the course will be going. The three-stage approach for this assignment will hopefully avoid final submissions that are off topic and unacceptable. We will evaluate your topic choice in terms of its potential for meeting the assignment objectives. If we deem this is questionable or difficult to be achieved, we will alert you to this effect and expect you to return a new topic description that seems more acceptable.
2) Thesis & Annotated Bibliography (15%) (due Mar. 6, )
Based on your topic choice, you are expected to submit a revised and clearly articulated thesis/argument for your paper, a concise contextualization of your project, plus an annotated bibliography of FIVE scholarly sources (peer-reviewed scholarly journal articles and/or books). Your thesis should be directly related to the impact of TNCs on their host economies in the global periphery. It should be clearly for, against or modifying an existing pertinent argument that you can identify from the literature; thus it is about some general theoretical concern, not your case study per se. It should be 1-2 well-articulated sentences. Your contextualization should be a very brief account of your case that can help the reader understand your project, it should be no longer than half page or 300 words. Your annotated bibliography is an alphabetical list of five research sources, 150-200 words on each item. Other than a (very) concise summary, the description should focus on why this source is relevant to your research project and how do you plan to use it in the final paper. The source is expected to be scholarly, i.e., not from a newspaper or informal online source. You are recommended to make use of UofT’s Writing Centre webpage for useful advices, including on how to write a good annotated bibliography.
3) Full paper (40%) (due Apr. 4, 6pm)
Your full paper/report should be about 10 pages, 2500-3000 words (excluding references and illustrations). It should include a short introduction of your chosen TNC, and a brief answer to four questions: when, where, why and how has the TNC gone global. The main body of your essay is to describe and critically assess the impact of the particular TNC on one of its host economies in the global periphery. Your discussion should be centered on a thesis developed on the basis of your tentative argument/focus stated in the first submission, unless with the instructor’s special permission for topic change as elaborated above.
In the main section of your paper you are expected to describe the nature and mechanism of the interaction between the TNC and the host economy and the key actors involved in the process based on your sources. Then you should explain why this has been the case, and discuss what could be done to make the situation better, if possible. You should have a conclusion that briefly summarizes your key findings and arguments.
Your submission will be digital through Quercus only. The basic format of your final paper should be double-spaced, 12 point Times-Roman or equivalent font. The borders should be the standard (1” top/bottom; 1.25” left/right). You are expected to produce a PDF version of your paper and upload it on Quercus. Provide a word count for your paper and number all pages. Use a scholarly journal article citation format (such as APA) that you are familiar with. Read Citing Sources / Create Your Bibliography for details. Your citation format should be consistent and complete.
You should use in-text citation and a reference list at the end, NOT footnotes. You should also use a word-processing spell check. Carefully proofread anything you hand in by checking for incomplete sentences and other obvious grammatical errors. Keep all your notes and other elements of ‘construction’ until the end of the course. You would also be well advised to have an extra printed copy of everything that you submit stored in your own files.
Be aware that cheating and plagiarism will not be tolerated and that I do check for this. The Department and University treat both as serious offenses and sanctions are severe.
