From United Nations University:
The growth and patterns of international production:
lessons for a contemporary analysis of the TNC
2.1 Introduction
a) the growth of the TNC in the context of international economic,
technological and political change
b) the TNC as:
i) an extension of the domestic multiactivity firm; the concept
of the cross-border value added chain
ii) an alternative to
(1) the market;
(2) collaboration between firms and/or
governments as a modality for coordinating
production and transactions across national
boundaries
2.2 The emergence and growth of TNCs
a) the early beginnings
i) chartered companies supported by State to exploit new lands and
trading routes e.g. the East India Company and the United African
Company
ii) wealthy individuals and families engaged in commerce, banking
and land development
iii) migrant populations
b) the start of the modern TNC 1870-1914
i) the background of the technological and organisational advances
of the last quarter of the 19th century; the emergence of
MANAGERIAL CAPITALISM; the internationalisation of trade and
investment; the TNC as an instrument of economic policy of the
colonial powers
ii) major types of FDI:
- expatriate (migrant capitalism)
- owner managed investment
- finance capitalism
- trading investments
iii) motivations
- to exploit natural resources for export to investing
countries (the resource seekers)
- to supply local markets with goods which could not be
provided (or provided as cheaply) by exports from the
home country: i.e. market oriented investments (the
market seekers)
- to foster a global or regional corporate strategy
i.e. rationalized investment (the efficiency seekers)
c) the inter-war years 1918-1939
i) the impact of protectionism on foreign direct investment
ii) rationalisations and mergers: vertical, horizontal and
conglomerate
iii) emergence of new financial and organizational methods
iv) concentration of international production
v) early FDI in developing countries
d) the post war period up to 1960
i) U.S. economic hegemony
ii) surge in technological development
iii) improved international communications and transport
iv) stable exchange rates
v) decolonization in Africa, Asia, the Pacific and the Caribbean
vi) TNC import-substitution investment in developing regions
(particularly Latin America)
e) the latter post-war period 1960-1990s
i) slower world economic growth, rising prices and instability
of exchange rates; US recovery in the 1980s, the debt crisis
and the slow down in FDI flows to most developing countries;
the collapse of bureaucratic socialist economies, and a surge
in FDI flows to some developing countries, notably China
ii) new technological advances, especially in information
technology towards end of period
iii) European recovery and depression, and the way towards the
European Union (i.e. the proposed completion of the internal
market by 31 December 1992). The Japanese challenge, and the
industrialisation of several Asian and Pacific Rim countries
iv) the opening up of East Europe and developing countries to
multinational commerce
v) confrontation between governments and TNCs in 60s and 70s;
followed by some degree of reconciliation
vi) growth of service activities in the world economy
vii) swing to the right in the political regimes of the majority
of countries; the deregulation and liberalisation of markets
viii) movement towards regional economic integration (EEC, LAFTA,
ASEAN, ANDEAN, CARICOM, THE PTA, CMEA, ECOWAS, THE MAGHREB &
UDEAC, MERCOSUR, APEC, NAFTA)
ix) evolution in developing countries' macro economic strategies
and policies and growing ability to negotiate effectively
with TNCs in some cases and difficulties in attracting
foreign investment in other cases
x) switch in development strategies of many developing countries
from import substitution to export led growth. Growing exports
of manufactures by TNCs. Participation of TNCs in export
processing zones
xi) response of TNCs to economic recession, structural change and
the new technologies of late 1970s and the 1980s. The role of
TNCs in structural adjustment programmes in developing
countries
xii) the emergence of co-operative agreements among TNCs; the
globalisation of corporate strategies
xiii) debt equity swaps and the role of TNCs
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Dymsza(1984)
Dunning in Casson(1983) Dunning(1982) Drurker(1986)
UNCTC(1988)
See Bibliography
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