1 / 7

Transnational corporations

Transnational corporations. What is a trans-national corporation?. A large business organization operating in at least two separate national economies. There are now over 62,000 parent companies with 900,000 foreign affiliates

olin
Download Presentation

Transnational corporations

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Transnational corporations

  2. What is a trans-national corporation? • A large business organization operating in at least two separate national economies. • There are now over 62,000 parent companies with 900,000 foreign affiliates • They’re the most dominant element of the world’s economy, accounting for $19 trillion in sales and 1/10 of the world’s GDP.

  3. Facts and figures on TNC’s • 29 of the top 100 economic entities in 2003 were corporations, not countries. • The majority of those were engaged in secondary sector activities, or manufacturers. • 90% of the world’s TNC’s have home offices located in a “triad”, of the US, the EU and/or Japan.

  4. Recently….. • Multinational corporations in the developing world are thriving and investing around the world: • The investment flow from India, Brazil, South Africa, Malaysia and China was up to $40 billion in 2004 from $3 billion in 1991.

  5. FDI • Foreign direct investment: the purchase or construction of foreign factories ad other fixed assets by TNC’s. • Also the purchase of or merging with foreign companies. • This is the engine that drives globalization. • Though most money has gone to certain Asian and Southeast Asian countries, in 2004, 42% of FDI inflows went to LDC’s.

  6. Affect on world trade • Most TNC’s operate in only a few industries: computers, electronics, chemicals, pharmaceuticals. • As for raw materials, 85% of the world trade in coffee, cotton, iron ore, and timber is dominated by just SIX firms.

  7. Comparative advantage • TNC’s make decisions on plant sites on an international scale, and produce where costs of materials, labor or other inputs is the least. • They can also maintain operational control and declare taxes where the economic climate is most favorable to them. • R&D and other corporate activities are wherever is optimal for the company.

More Related