The future of the economy: the advantages and disadvantages of transnational corporations. TNCs and their role in the global economy

Analysis of the activities of TNCs and theories of foreign direct investment allows us to identify the following main sources of effective activity of TNCs (compared to purely national companies):

• o using the advantages of owning natural resources, capital and knowledge, especially the results of R&D, over firms operating in one country and satisfying their needs for foreign resources only through export-import transactions;
• o opportunity optimal location of their enterprises in different countries taking into account the size of their domestic market, economic growth rates, prices and qualifications of labor, prices and availability of others economic resources, infrastructure development, as well as political and legal factors, among which the most important is political stability;
• o the possibility of accumulating capital within the entire TNC system, including borrowed funds in the countries where foreign branches are located, and applying it in the most favorable circumstances and places for the company;
• o use of financial resources from all over the world for their own purposes;
• o constant awareness of the situation in commodity, currency and financial markets in different countries, which allows you to quickly transfer capital flows to those countries where conditions exist for obtaining maximum profits, and at the same time distribute financial resources with minimal risks (including risks from fluctuations in national currency rates) ;
• o a rational organizational structure, which is under the close attention of the TNC management, is constantly being improved;
• o creating new jobs and providing more high level wages compared to the national average;
• o the possibility of making large investments in R&D. As of 2003, in the USA the share of TNC investments in R&D is 12%, in France - 19%, and in the UK - 40%;
• o experience in international management, including optimal organization of production and sales, maintaining a high reputation of the company.

The sources of this type of performance are dynamic: they typically increase as the company's assets grow and its activities diversify. At the same time, the necessary conditions for the implementation of these sources are reliable and inexpensive communications between the parent company and foreign branches, a wide network of business contacts of the foreign branch with local companies in the host country, and its skillful use of the opportunities provided by the legislation of that country.

At the same time, one cannot help but see that TNCs indeed remain a source of a number of negative social consequences associated with the selfish motives of their activities. This - a common problem market economy and the large capital dominating it. But it becomes especially painful in the sphere of international economic relations. In an effort to seize markets abroad, TNCs do not hesitate to suppress national production. There are frequent cases of buying up local enterprises not for reorganization, but for curtailing production, especially in under- and moderately developed countries. Extracting high profits by exploiting cheap labor and natural resources, large multinationals often choose to invest profits outside these countries. Transnational companies, including banking ones, receive enormous tribute through financial transactions on the world market.

To achieve their goals, TNCs also resort to interference in political life, feeding convenient political figures, political groups and regimes, limiting the state independence of other countries.

All these are real phenomena, and on their own they are unlikely to disappear. It is necessary to create a system for regulating the activities of TNCs, norms and rules of the game that limit negative manifestations. The antimonopoly legislation of the countries where the centers of TNCs are located and where their foreign activities are deployed has a positive impact on TNCs.

Many of the models described above are characterized by a one-sided and narrow view of the complex problem of transnational corporations. The English economist J. Dunning developed an eclectic model that absorbed from other models what had been tested by real practice. According to this model, a company begins production of goods and services abroad subject to the coincidence of three prerequisites: 1) the presence of competitive (monopolistic) advantages compared to other companies in the host country (specific advantages of the owner); 2) conditions in the host country facilitate the organization of production of goods and services there instead of exporting them (advantages of internationalization of production); 3) the ability to use production resources in the host country more efficiently than at home (location advantages).

1.2. Advantages and disadvantages of TNCs

Analysis of the activities of TNCs and theories of foreign direct investment allows us to identify the following main sources of effective activity of TNCs (compared to purely national companies):

Taking advantage of ownership of (or access to) natural resources, capital and knowledge, especially the results of R&D, over firms operating in one country and satisfying their needs for foreign resources only through export-import transactions;

The possibility of optimal location of their enterprises in different countries, taking into account the size of their domestic market, economic growth rates, prices and qualifications of labor, prices and availability of other economic resources, infrastructure development, as well as political and legal factors, among which the most important is political stability;

The ability to accumulate capital within the entire TNC system, including borrowed funds in the countries where foreign branches are located, and its application in the most favorable circumstances and places for the company;

Using the financial resources of the whole world for your own purposes.

Constant awareness of the situation in commodity, currency and financial markets in different countries, which allows you to quickly transfer capital flows to those countries where conditions exist for obtaining maximum profits, and at the same time distribute financial resources with minimal risks (including risks from fluctuations in national currency rates);

The rational organizational structure, which is under the close attention of the TNC management, is constantly being improved;

Creating new jobs and ensuring higher wages compared to the national average;

Possibility of making large investments in R&D. As of 2003, in the USA the share of TNC investments in R&D is 12%, in France - 19%, and in the UK - 40%;

Experience in international management, including optimal organization of production and sales, maintaining a high reputation of the company. The sources of this type of performance are dynamic: they typically increase as the company's assets grow and its activities diversify. At the same time, the necessary conditions for the implementation of these sources are reliable and inexpensive communications between the parent company and foreign branches, a wide network of business contacts of the foreign branch with local companies in the host country, and its skillful use of the opportunities provided by the legislation of that country.

At the same time, one cannot help but see that TNCs indeed remain a source of a number of negative social consequences associated with the selfish motives of their activities. This is a general problem of the market economy and the big capital dominating it. But it becomes especially painful in the sphere of international economic relations. In an effort to seize markets abroad, TNCs do not hesitate to suppress national production. There are frequent cases of buying up local enterprises not for reorganization, but for curtailing production, especially in under- and moderately developed countries. Extracting high profits by exploiting cheap labor and natural resources, large multinationals often choose to invest profits outside these countries. Transnational companies, including banking ones, receive enormous tribute through financial transactions on the world market. .

To achieve their goals, TNCs also resort to interference in political life, feeding convenient political figures, political groups and regimes, limiting the state independence of other countries.

All these are real phenomena, and on their own they are unlikely to disappear. It is necessary to create a system for regulating the activities of TNCs, norms and rules of the game that limit negative manifestations. The antimonopoly legislation of the countries where the centers of TNCs are located and where their foreign activities are deployed has a positive impact on TNCs.

Chapter 2. ACTIVITIES OF TNCs IN THE WORLD ECONOMY

2.1. Industry structure of TNCs

The indicators in the table below characterize the industrial and sectoral specialization of 100 global TNCs.

Table 1. Industry specialization of 100 global TNCs: 1996 and 1997, number of industries, average transnationality index (IT)

From a legal point of view TNK can be considered as a group uniting branches located in several countries. The nature of the relationships through which TNCs extend their influence far beyond their own subsidiaries is very diverse: contracts for parts processing or contract work, distribution or franchise agreements, assignment of patents, etc.

The weight of a company is determined primarily by its size; a small or medium-sized enterprise with branches in several countries is not yet a TNC.

According to the definition of the Harvard University research program, companies classified as transnational include:

• having more than six foreign subsidiaries;
• whose shares are circulated in many countries and are available for purchase in all countries in which they operate;
• the composition of the top management is formed from nationals of different states, which excludes the unilateral orientation of the company’s activities towards the interests of any one country;
• having an international nature of the mentality of a manager adhering to a geocentric position;
• whose organizational structure is focused on large-scale economic activity and the effective implementation of the company's strategy.

TNCs today are about 60 thousand. main (parent) companies and more than 500 thousand. their foreign branches and affiliated (dependent) companies around the world. The role of TNCs in the formation of key, defining trends in the development of the modern world economy can hardly be overestimated. As truly transnational centers of decision and action, they have a significant impact on the global economy.

Through their investment decisions and production location choices, TNCs play an important role in the distribution of global productive capacity. Their influence on international trade in proportion to their participation in this trade. According to some estimates, TNCs carry out more than half of the world's foreign trade turnover. TNCs account for more than 80% of trade high technology. Forming a single network, transnational capital owns one third of all production assets and produces almost half of the planetary product.

The scale of their international financial transactions gives them a privileged position as borrowers or investors in the Eurocurrency market, with approximately $8 trillion at their disposal. euromoney. TNCs control up to 90% of the export of capital. The total foreign exchange reserves of transnational companies are 5-6 times greater than the reserves of the central banks of all countries of the world.

By expanding their transnational activities, they create economic prerequisites for organizing international production with a single market and information space and an international market for capital, labor, scientific, technical, consulting and other services. Fighting for markets on a global scale, TNCs are increasing the level of competition, which creates a need for constant innovation, changing technologies and accelerating scientific and technological progress. By facilitating the circulation of capital, people and technology, they contribute significantly to economic growth and development.

However, their economic power becomes a source of hidden conflicts with those states on whose territory they operate. As such, TNCs are increasingly shaping international politics.

The incentives for business globalization in the financial and credit sphere are reductions in tax rates and customs duties, the possibility of extending the deadline for paying taxes, obtaining permission for accelerated depreciation, free transfer or return of capital gains and the base amount of an external loan. Tax savings give the company financial mobility, which is necessary, in particular, for highly profitable foreign projects.

A multinational company has greater flexibility in taking advantage of the incentives provided by the host country for foreign investment in the form of government guarantees, exemptions or reductions in taxes and duties, and other support measures. Such a company is able to move funds and profits through internal mechanisms of financial transfers that form part of its finances, due to differences in national tax systems and significant costs and restrictions on external, international and financial transfers. Using intra-company flows of funds and funds, TNCs are able to arbitrage tax systems, financial markets and government regulation methods.

Classification of TNCs

The variety of TNCs operating in the world can be classified according to a number of criteria. The main ones are: country of origin, industry focus, size, level of transnationalization.

The practical significance of the classification of TNCs is that it allows one or another to more objectively assess the advantages and disadvantages of locating specific corporations in the host country.

Country of origin

The country of origin of a TNC is determined by nationality of capital in its controlling interest, assets. As a rule, it coincides with the nationality of the home country of the parent company of the corporation. For TNCs in developed countries, this is private capital. For TNCs in developing countries, a certain (sometimes significant) part of the capital structure may belong to the state. This is due to the fact that they were initially created on the basis of nationalized foreign property or state-owned enterprises. Their goal was not so much to penetrate the economies of other countries, but to create the basis for the development of national industry and the rise of the country's economy.

Industry focus

The sectoral orientation of a TNC is determined by the main area of ​​its activity. On this basis, we distinguish between commodity-based TNCs, corporations operating in basic and secondary manufacturing industries, and industrial conglomerates. Currently, transnational corporations maintain their position in the basic sectors of the mining and manufacturing industries. These are areas of activity that require significant investment. In 2003, on the list of the world's 500 largest multinational corporations, 256 operated in such areas as electronics, computers, communications, food, beverages and tobacco, pharmaceuticals and cosmetics, as well as commercial services, including on the Internet.

Multinational corporations perform abroad different kinds Research and development work: adaptive, starting from basic auxiliary processes and ending with modification and improvement of imported technologies; innovative, related to the development of new products or processes for local, regional and global markets; technological monitoring carried out by a specially created division (department) in the branch that monitors the development of technologies in foreign markets and learns from leading innovative enterprises and clients.

The choice of one or another type of R&D and their industry specialization depend on the region and level of development of the host country. For example, in South-East Asia Innovative R&D is dominated by computers and electronics; in India, by the services sector (especially software), in Brazil and Mexico - with the production of chemicals and transport equipment.

For multinational corporations conglomerate type in order to determine their specialization, the so-called industry A is identified, which the United Nations characterizes as having a significant amount of foreign assets, greatest number foreign sales and the largest number of employees abroad. It is in this industry that the largest amount of corporate investment is directed, and it is this industry that generates the largest profit for the corporation. The basis for classifying a particular TNC industry as industry A is the calculation of index B - transnationalization index for individual sectors of the corporation. This index is recommended by UNCTAD (a body of the UN General Assembly). It is calculated as the arithmetic average of three indicators: the share (ratio) of the volume of foreign assets, sales, number of employees to the total volume of assets, sales and number of employees in a given industry of a particular TNC.

In relation to TNCs in general, the economic meaning of this indicator is that it can be used to determine what role a particular TNC plays in the global economy. This is an integral indicator calculated as a percentage. Based on its value, one can determine and compare the activity of TNCs abroad and in the domestic market of the home country. As a rule, the higher the B index, the more diversified the activities of TNCs abroad. It is interesting to note that there is no direct relationship between the size of TNCs and the level of transnationalization. Moreover, often smaller TNCs are more transnational. According to UNCTAD, in a sample of 50 small and medium-sized TNCs, the transnationalization index was 50%.

To characterize the trend in changes in the international activity of TNCs, the UN recommends the indicator " internationalization index"(AI). It is calculated as the quotient of the number of foreign branches of TNCs divided by their total number.

The share of the foreign component in the activities of TNCs, characterized by the B and AI indices, as well as trends in their changes, make it possible to assess the growing role of TNCs in the global and national economies.

Multinational corporation size

A classification attribute that is determined according to the UNCTAD methodology by the size of their foreign assets. It is this parameter that underlies the diversification of TNCs into the largest, large, medium and small. Large TNCs include TNCs with assets over $10 billion.

The vast majority in total number TNCs (over 90%) belong to medium and small corporations. According to the UN classification, these include companies with less than 500 employees in their country of residence. In practice, there are TNCs with a total number of employees of less than 50 people. The advantage of small TNCs is their ability to quickly adapt to changing market conditions. They can act in alliance with large TNCs, forming various kinds of concerns.

Functions of TNCs in the global and national economies

Modern multinational corporations perform in the global economy important functions , the set of which is constantly expanding. All their diversity fits into the definition of “stimulating”.

1. TNCs stimulate scientific and technological progress, since most of the research work is carried out within their framework, and new technological developments appear.
2. TNCs stimulate the trend of globalization of the world economy, contributing to the deepening of MRI and involving host countries in international economic relations.
3. TNCs stimulate the development of global production. As the world's largest investors, they are constantly increasing production capacity, creating new types of products and jobs in host countries, stimulating the development of production there, and therefore the world economy as a whole.
4. TNCs stimulate competition in the global market. This is not contradicted by the fact that they have the highest competitiveness.

Competitive advantages of TNCs:

• Ownership and access to natural resources, capital and R&D results around the world.
• Horizontal diversification into different industries or vertical integration across technological principle within one industry, providing in both cases economic stability And financial stability TNK.
• The ability to choose the location of branches in different countries, taking into account the size of their national markets, economic growth rates, prices, availability of economic resources, as well as political stability.
• Low cost of financial resources due to wider opportunities for attracting them.
• Economy of enterprise scale
• Access to qualified personnel and rich opportunities for their selection

Negative manifestations of TNC activities

• Significant or possible monopolization of local markets.
• The opportunity for TNCs to dictate their terms not only to their competitors, but also to entire national economies, which poses a threat to their national security.
• Relocating economically polluting industries to least developed host countries
• Increasing trend towards employment reduction at TNC enterprises. This trend is especially pronounced in branches of developed countries, and this is happening under the influence of the globalization of the labor market.

Organization of activities of transnational companies in Russia

1.4 Economic advantages of TNCs

multinational corporation economic production

The ultimate goal of TNC activities is the appropriation of profits. To achieve this goal, they have many advantages over other participants in international economic relations.

Let us highlight the main motives of TNCs when globalizing their business:

§ the desire for technological leadership, which is modern world collateral competitive advantage in markets;

§ optimization of the size of the corporation and economies of scale of the organization, which is no longer feasible within the narrow framework of national markets;

§ access to foreign natural resources to reliably supply domestic production with raw materials;

§ the struggle for new, including foreign, markets, overcoming import barriers;

§ reducing costs and increasing the competitiveness of their products through the dispersal of production and the rationalization of individual operations of the reproduction process;

§ introduction of a unified management system for the corporation's enterprises, organization of the internal market, creation of an advertising and information network;

§ establishing strong control over the markets of foreign countries not only through branches of parent companies and mixed enterprises, but also through alliances with political elites, through which they exert multidimensional influence on the host states.

§ rationalization of taxation through the use of specific features of the tax systems of the countries in which the corporation operates. (1)

Now let's move directly to the economic advantages of TNCs. First of all, TNCs make up for the limitations of the domestic market by foreign countries, since any market has its own capacity. Usually, large companies have a well-known trademark and products that are in demand among consumers; have significant financial resources. Thus, the company focuses on a specific market segment that can provide the organization with the required sales volume and profit level. (2)

This leads to the second advantage of TNCs - the relative ease of market penetration. Ease is relative since some countries may pursue protectionist policies towards their companies. It involves taking measures to curb the penetration of foreign companies into the local market. However, in contrast to this, the same government can available means provide significant assistance in the expansion of a particular corporation into foreign markets. (1)

The third advantage is favorable conditions in competition. TNCs are capable of conducting both price and non-price competition. They save significant funds on the scale of production (with an increase in production volumes they decrease fixed costs per unit of production). This allows you to manipulate the price of your products within wider limits than a company with a small production volume. The possibility of conducting non-price competition is again associated with significant financial resources that are at the disposal of the organization. Hence the opportunity to invest more money in R&D (research and development work) and marketing.

The next advantage of TNCs is the ability to use the resources of other countries. Such a resource can be anything: labor, minerals, production capacity.

In addition, TNCs are able to quickly move production resources between their branches to where they are used most effectively. The meaning of such a move is to reduce production costs and more rational use one or another factor of production.

And finally, the last advantage of TNCs is its stability during crises. Here again, the determining role is played by the scale of production, thanks to which the company can manipulate not only the price of products, but also the volume of its output.

We can conclude that it is precisely thanks to the above advantages that TNCs are the leading organizational structure on the world market and control a significant part of international trade.

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This section provides answers to the question: What is the role of transnational corporations in the global economy? Advantages and disadvantages of TNCs?

The role of TNCs. Advantages and disadvantages

The subsection examines the advantages and disadvantages of TNCs, their impact on the global economy, and the role of TNCs in the global economy.

Transnational companies, represented in many countries of the world, are able to influence all spheres of public life.

TNCs contribute to the development of scientific and technological progress, since scientific and technical work is carried out within their framework, new technologies appear in order to improve production.

Many multinational corporations have monopoly power. Some of them have such a high turnover that they surpass many countries.

International corporations stimulate the trend of globalization of the world economy, involving countries in international economic relations.

Stimulate the development of global production. Because TNCs are creating more and more new products, expanding the scale of their activities, thanks to this, more and more jobs are appearing, which helps reduce unemployment in the country.

TNCs promote optimal resource allocation and production location.

Contribute to expanding the boundaries of international cooperation.

Transnational companies influence not only the formation of the economy as a whole, but also the economy of individual countries. International companies for each individual state are subjects of the world economy and must act in accordance with the legislation of each country.

The activities of TNCs in a competitive environment shows the competitiveness of the country it represents. That is, the prosperity of the country largely depends on the success of companies operating on its territory and that are international. Companies that produce products that are competitive on the world market and are primarily export-oriented contribute significantly to strengthening the country’s foreign trade position.

For countries, the operation of branches and companies of TNCs is good because those goods that previously had to be imported are now available thanks to the activities of international corporations. Consequently, there was no need for imports.

TNC employees can move from country to country and still remain employed by the same company.

In the activities of international corporations, unfortunately, there are not only advantages, but also disadvantages. We will look at them now.

Firstly, TNCs are highly competitive, making it simply impossible for domestic production to break into the market.

Secondly, the seizure by foreign firms of the most developed and promising segments of industrial production and research structures of the host country.

Thirdly, it happens that TNC subsidiaries violate national legislation by hiding part of their income from taxation.

Fourth, the establishment of monopoly prices, the dictate of conditions that infringes on the interests of the receiving countries.

Fifthly, transnational companies can move their capital between countries quite easily. For example, if the situation in the country is unfavorable, a TNC can transfer its capital to a country with the most favorable situation, as a result of which the first will experience even greater difficulties.

In turn, TNCs choose the countries they prefer most, most often these are developed countries. The reason for this: the export of capital and the organization of production abroad further increase the competitiveness and power of corporations, whose activities are based on the use of scientific, technical and organizational processes, and the export of capital, as is known, pursues the goal of developing new capacious markets.

TNK is constantly developing the network of its foreign branches, trying to cover, if not the whole world, then at least significant areas of it. The number of agreements between several companies on scientific and technical cooperation is rapidly growing, which should further strengthen their competitive position.

Also the basis of competitiveness is that TNC controls the entire production process: from raw materials to sales finished products. This allows for the most effective development international division labor and create highly efficient production combinations.

Continuous technology improvement and development scientific discoveries requires huge costs, but this is a necessity for the functioning of TNCs. However, for many TNCs this is one of the problems on the way to efficient work production.

Some believe that transnational companies have a negative impact on the global economy, while others believe that they have a positive impact on it. As for my personal opinion, MNCs are necessary elements in the process of shaping the world economy. And although there are a number negative traits TNK, all these disadvantages cover enough big advantages. Transnational corporations have a beneficial effect on international relations, primarily on the state of international security, since they contribute to the development of interdependence of various states, making any aggression of countries connected by a system of transnational corporations unprofitable.

The significant role of transnational corporations in the modern world has been established. TNCs are capable of influencing all spheres of public life: they stimulate the trend of globalization of the world economy, contribute to the growth of scientific and technological progress, stimulate the development of world production, contribute to expanding the boundaries of international cooperation, etc.

TNCs can influence both the economy as a whole and the economy of a particular country.

The advantages and disadvantages of TNCs have been identified, but their irreplaceable role has been proven. As a result, it can be said that TNCs cannot be viewed only from a negative or only from a positive point of view; their activities play a vital role in shaping the economy.