TNCs

TNCs

1. characteristics

   • NIDL: fragmentation and flexibility of production
     • outsourcing
   • operational activities across int'l border
     • HQ in home
     • pdn plants-host
   • int'lzd operating process
     • coordinate & control stages
     • adv of CA and geographical distribution of FOP
   • diverse pdt range
     • ecy of scale
   • powerful ecy force
     • large mkt share
   • selective and uneven distribution
     • Eur, EAsia, US
     • Africa: less
     • adapt op to suit local culture: McD
   • footloose

2. driving force of globalisation

3. enterprises that engage in FDI and organise production of g&svc in >1 country

4. 10% of world GDP 1/3 of world X

5. spatial org

   • (1) Corporate and regional HQ
     • major strategic investment decisions
     • strategic location (global cities)
       • 90% based in EMDCs
     • regional HQ in NIEs
     • recent: TNCs from NIEs
       • machinery, electronics, cars from EATigers
   • (2) R&D facilities
     • home country bias
       • skilled lbr + linkages
       • amenity-rich setting, 'quality living'
   • (3) Production units/branch plants
     • EMDC
       • history of engineering/traditional skill set
         • brownfield sites: derelict industrial land cheap
     • ELDC:lower pdn cost wage, land, xport
     • host-market penetration
     • evade tariff/M duties
     • rapid after-sales svc
   • old: single-plant location
     • only X globally
   • outsourcing
   • x-border investment
     • transnat vertical integration
     • geographical specialisation by process/semi-finished pdt

6. command & control r/s

   • command
     • : TNCs gen wealth and N for hosts
     • dictate ecy specialisation
   • control
     • policies and political stability
     • infra and amenities
   • interplay: negotiated outcomes