Economic Geography

12 Globalizing Asian capitalisms 
An economic-geographical 
perspective
Henry Wai-Chung Yeung
Introducing the contradiction
By the late 1960s and throughout the 1970s, there was no doubt that American
firms and their counterparts from Western Europe were spearheading the 
globalization of economic activities through their cross-border foreign direct
investments (FDI). This special genre of the capitalist firm has been described as
the modern transnational corporation (TNC). Its rapid emergence especially since
the 1960s became the cause of some serious political and economic concerns 
by the early 1970s (Vernon 1971). In economic geography, much attention
during the same period was paid to the role of branch plants externally controlled
by these TNCs in local and regional economic development in advanced indus-
trialized economies. The analytical foci were placed on industrial linkages and
decision-making in these branch plants and their local and regional economic
impact (Dicken 1976; Hamilton 1974).
Amidst this growing fear of external control by TNCs of local and regional
economies in the host developed and developing countries, a parallel, but slightly
belated, process of outward investment by business firms based in what was then
known as the ‘Third World’ began to gather momentum (Agmon and Kindleberger
1977; Lall 1983; Wells 1983). By the late 1970s, the rise of these so-called ‘Third
World multinationals’ was hailed by two business school professors in their Harvard
Business Review article as ‘only yesterday an apparent contradiction in terms’ and
‘now a serious force in the development process’ (Heenan and Keegan 1979:
109). They further argued that: ‘The multinational corporation, long regarded
by its opponents as the unique instrument of capitalist oppression against the
impoverished world, could prove to be the tool by which the impoverished world
builds prosperity’.
What does this ‘contradiction’ of TNCs from developing countries entail and
how does it contribute to the globalization and transformation of their home
capitalist economies? In this chapter, I address this research problem in relation to
the distinctive contributions made possible by adopting an economic-geographical
perspective. In particular, I argue that an explicit attention to business and
production networks spanning different spaces and scales has enabled economic

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Henry Wai-Chung Yeung
geographers to draw significant interconnections between the rapid emergence of
these developing country TNCs and the tremendous transformations in their
home economies in Asia during the past three decades – a phenomenon broadly
known as ‘globalizing Asian capitalisms’. Indeed, many TNCs from developing
Asian countries had a humble origin as regional trading and commercial ventures;
they had internationalized across national boundaries as early as the late nineteenth
century. Their participation in globalization, however, did not occur until much later
in the 1980s when the global economy was increasingly competitive, their orga-
nizational capabilities were much more consolidated, and their home govern-
ments were serious about growing ‘national champions’ (see Yeung 1999). In this
sense, these Asian-origin TNCs are important conduits through which their
burgeoning domestic economies become articulated into the global economy.