Advantages and disadvantages of the activities of transnational corporations. Coursework: TNCs and their role in the global economy

29.09.2019

Department: Economics, finance and law

Discipline: International economic relations

Coursework by discipline

“International Economic Relations”

“Transnational corporations and their role in the global economy”

INTRODUCTION 3

Chapter 1. TRANSNATIONAL CORPORATIONS (TNCs) 5

1.1. Theoretical concepts of TNCs... 5

1.2. Advantages and disadvantages of TNCs... 7

Chapter 2. ACTIVITIES OF TNCs IN THE WORLD ECONOMY. 10

2.1. Industry structure of TNCs.. 10

2.2. Location of TNCs in the world. 13

2.3. Dynamics of TNCs... 15

2.4. Movement of capital through TNCs.. 18

Chapter 3. RUSSIA AND TNCs.. 25

3.1. Foreign TNCs in Russia. 25

3.2. Russian TNCs.. 27

CONCLUSION. 32

BIBLIOGRAPHICAL LIST... 34

APPENDIX 1. 36

APPENDIX 2. 38

APPENDIX 3. 39

APPENDIX 4. 40

INTRODUCTION

The modern world economy is characterized by a rapidly moving process of transnationalization. In this process the main driving force are transnational corporations (TNCs). They are business associations consisting of a parent (parent, mother) company and foreign branches. The parent company controls the activities of the enterprises included in the association by owning shares (participation) in their capital. In foreign branches of TNCs, the share of the parent company - a resident of another country - usually accounts for more than 10% of the shares or their equivalent.

At the turn of the XX-XXI centuries. there is an unprecedented scale foreign economic activity(international economic transactions), in which TNCs are traders (merchants), investors, distributors modern technologies and stimulators of international labor migration. They largely determine the dynamics and structure, the level of competitiveness in the global market for goods and services, as well as the international movement of capital and technology (knowledge) transfer. TNCs play a leading role in the internationalization of production, an increasingly widespread process of expanding and deepening production ties between enterprises in different countries.

In scientific and journalistic literature, two traditions have emerged in the assessment of transnational corporations. One of them focuses on the constructive role of TNCs in increasing efficiency modern economy and goes in line with positivist economic theory. The other is highly critical, revealing, with an emphasis on the negative social aspects of the activities of large international corporations. It reflects the influence of stereotypes of the theory of imperialism of the last century and modern anti-globalism.

The topic of TNCs and their role in the world economy is touched upon in many monographs devoted to the problem of globalization of the economy, since the formation and growth of TNCs is the result of the internationalization of the economy and the development of the world market.

It seems to me that real experience and trends dictate the need to overcome one-sidedness and develop a more balanced approach to assessing the role of TNCs in modern socio-economic development. Such an approach includes the recognition that the transnationalization of capital is fundamentally a natural process that accelerates socio-economic development. It promotes the dissemination of new technologies, forms of organization of production, management and marketing, involvement in turnover and effective use of labor and natural resources, reduction transaction costs, thereby facilitating the implementation of large international projects. Within the framework of a market economy, there is no alternative to the transnationalization of capital. All countries, including Russia, are interested in expanding and improving the activities of TNCs.

The purpose of this course work is to analyze transnational corporations and their role in the global economy.

Coursework objectives:

· give the concept of TNC;

· analyze the theoretical concepts of TNCs;

· note the advantages and disadvantages of TNCs;

· characterize the activities of TNCs in the world economy;

· consider the activities of TNCs in Russia.

Global trends economic development reject the closedness and self-isolation of the national economy and lead to the development of modern, competitive companies, a clear example of which are TNCs.

Chapter 1. TRANSNATIONAL CORPORATIONS (TNCs)

1.1. Theoretical concepts of TNCs

Modern concepts of TNCs are based on the theory of the firm as an enterprise for organizing the production and marketing of goods and services. Most international companies began their activities by serving national markets. Then, using the comparative advantages of the home country and competitive advantages their company, they expanded their operations in international markets by exporting products abroad or making foreign investments to establish production in host countries.

Celebrating main feature TNCs - the presence of foreign branches for the production and sale of goods and services based on direct investment, researchers of transnational corporations have developed a number of models of foreign direct investment.

The American economist J. Galbraith substantiated the origin of TNCs for technological reasons. In his opinion, the organization of foreign branches of international companies is largely due to the need for sales and technical service abroad of complex modern products that require a goods and service distribution system (network) of enterprises in host countries. This strategy allows TNCs to increase their share in the global market.

The model of monopolistic (unique) advantages was developed by the American S. Hymer, and was subsequently developed by C. P. Kindleberger and others. In accordance with the theory of monopolistic advantages, a foreign investor needs advantages over local firms of the host country, which are well aware of the “rules of the game” in their own country. market, have extensive connections with the local administration and do not incur large transaction costs, i.e. transaction costs compared to a foreign investor. Monopolistic advantages for a foreign firm may arise due to the use of original products that are not produced by local firms; availability of advanced technology; "economy of scale", which makes it possible to obtain large mass profit; favorable state regulation for foreign investors in the host country, etc.

The product life cycle model was developed by the American economist R. Vernon based on the theory of firm growth. According to this model, any product goes through four stages of the life cycle: I - introduction to the market, II - sales growth, III - market saturation, IV - sales decline. The way out of a decline in sales on the domestic market is to export or establish production abroad, which will prolong life cycle product. At the same time, at the stages of growth and market saturation, production and sales costs are usually reduced, which makes it possible to reduce the price of the product and, consequently, increase the possibility of expanding exports and increasing the volume of production abroad.

In most TNCs, they are large oligopolistic or monopolistic enterprises with diversified, horizontal or vertical integration of production; they control the production and marketing of products and the provision of services both in the home country and beyond its borders. Using the idea of R. Coase that within a large corporation between its divisions there is a special internal market regulated by the management of the corporation, the English economists P. Buckley, M. Casson, J. McManus and others created a model of internalization, according to which a significant part of international economic transactions are actually intra-company transactions between divisions of large economic complexes. All elements of the international structure of the corporation function as a single, coordinated mechanism in accordance with the global strategy of the parent company, aimed at achieving the main goal of the TNC - generating profit from the functioning of the complex of enterprises as a whole, and not from each of its links.

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;

Possibility of optimal location of your 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;

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):

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 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;

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

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

Rational organizational structure, which is under close attention management of TNK, constantly improving;

Creation of new jobs and provision of higher quality 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 a 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 - 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 weak and medium-sized 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 intervention in political life, feed 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)

	Absolute increase	Relative growth	2002 average index
Chemical products and pharmaceuticals
Electronics/ electrical equipment
Cars
Oil, oil refining, mining
Food
Miscellaneous Products
Telecommunications
Trade
Mechanical engineering
Metallurgy
Construction
Medicine

Formation of competitive advantages of TNCs in the context of globalization

The activities of transnational companies (TNCs) in the international economic environment occur in conditions of global competition. The strengthening of which is due to the intensification of international exchange and the development of international trade, the intensification of foreign investment, and the functioning of the world market. In these circumstances, in order to maintain the positions occupied by a transnational company and expand its activities, it is necessary to increase its competitiveness and provide significant competitive advantages. In modern crisis conditions The emphasis of globalization processes is changing; after entering the world market, most companies are trying to expand their areas of activity. Entering and conquering new markets determines the transformation of the conditions of competition and the tools of competition. Therefore, the problem of forming competitive advantages of transnational companies in the context of globalization is becoming increasingly urgent.

Thus, modern globalization processes are characterized by increased interdependence and mutual influence various fields activities in the field of international business. Which makes it difficult to support and increase the competitiveness of multinational companies. Since a competitive advantage achieved today may cease to be so tomorrow, therefore, the processes of studying competitive conditions, monitoring competitors and searching for undeniable and sustainable competitive advantages are an objective condition for the effective operation of TNCs in the international market.

The problem of forming competitive advantages of TNCs is multifaceted, since it requires research in several areas:

– theories and practices of competitiveness,
– trends in globalization processes,
– specific features activities of TNCs.

Porter made a significant contribution to the disclosure of the theoretical aspects of competition, including international competition. His works became fundamental for many studies in the field of development of the theoretical foundations of enterprise competitiveness.

Despite the significant number scientific publications in the field of competitiveness of TNCs. Further development requires issues of achieving and maintaining sustainable competitive advantages of TNCs, taking into account the specifics of their activities and changes in the international business environment. Which are due to the continuation of globalization processes, the rapid development information technology, increased innovation, changes in technology and other factors.

It is necessary to clarify the essence of the competitive advantage of TNCs

Determine the conditions and tools for the formation of their competitive advantages, taking into account modern trends globalization and the specifics of their activities in the international business environment.

According to the Interbrand agency, the undisputed leader of the world market is the Coca-Cola brand, which has been firmly in first place for the last 13 years. Although in terms of brand value in 2011, in the amount of $74,000 million..., it is in 6th place. Intense competition is observed between Microsoft and IBM, which belong to the software field. Moreover, in 2005-2007, the second position in the ranking was occupied by Microsoft, and since 2008 this position was “recaptured” by IBM, holding it now and moving Microsoft to third place.

Stable high rating Among the 100 best global brands, General Electric took 4th place in 2005-2009, 5th place in 2010-2011. Since 2010 and now in the top ten best brands The Google brand came to 4th position after 10th position in 2008 and 7th position in 2009, that is, the rank of this brand gradually improved. In 2005-2006, Intel was in the top five, but in subsequent years its position worsened; in 2007-2008 and 2010-2011 it fell to 7th place, in 2012 it dropped to 1st place.

IN different periods during 2005-2012, the top ten brands also included the following: Nokia, Disney, McDonald’s, Toyota, Marlboro, Mercedes-Benz, Hewlett-Packard, Samsung. Since 2011, the Apple Inc. brand has entered the top ten global brands. And took 8th place. A year later, in 2012, the rating of this brand immediately rose by 6 positions to 2 places. In general, in 2012 there were significant changes in the world rankings. New leaders emerged, in particular “Apple Inc.”, “Samsung”, at the same time “Disney”, “Hewlett-Packard” moved beyond the top ten, “IBM”, “Microsoft”, “GE”, “ McDonald's", "Intel". All this indicates fierce competition in the global market in the field of global business.

Valuation of trademarks of public companies

Public companies using our own patented methodology based on their financial performance. A prerequisite for inclusion in the global ranking is that the brand’s products must be presented on at least three continents. At least a third of the proceeds from their sales must come from abroad.

The specificity of competition in global business is not only rivalry between companies, but also between industries. The structure of the companies included in the 100 with the highest brand value indicates a significant predominance of banks and telecommunications companies. Their share is 20 and 15%, respectively. Technology and software companies account for 11% of the structure. Share of companies food industry and retail is 7% each. The top five most expensive brands include Apple Inc., whose value is estimated at $153,285 million, Google ($111,498 million), IBM ($100,849 million), McDonald's ( $81,016 million), Microsoft ($78,243 million). The competition will continue to intensify in the future.

It should be noted that among the 100 world leaders in brand value there is no domestic company; among the CIS countries in the first hundred there is only the Russian commercial bank Sberbank, which indicates the low level of cost and competitiveness of domestic TNCs and to strengthen their positions in the world market it is necessary to grow their business, expand their spheres of influence, increase their market share, and this is almost impossible without increasing their competitiveness and having competitive advantages.

Modern processes of globalization of the world economy

Modern processes of globalization of the world economy are characterized by

– strengthening international concentration and centralization of financial resources,
– strengthening the positions of the largest TNCs – leaders of the world market,
– intensification of competition between them,
– changes in the role of states and political instability in the world,
– accelerating the development of communication and information technologies,
– intensification and changes in world trade.

Globalization has covered all levels; it manifests itself at the meso-, macro-, and micro levels. Since TNCs are the main economic entities of the world economy, globalization processes at the micro level necessitate changes in strategy and tactics, the model of organizing their activities to ensure sustainable competitive advantages and increase competitiveness.

Determination and justification of directions for the formation of competitive advantages of TNCs

Determining and justifying the directions for the formation of competitive advantages of TNCs in the context of globalization requires clarification of the essence of the concept of “competitive advantages”. To do this, let us analyze the views of scientists. In particular, Michael Porter defines competitive advantage as a set of factors that determine the success or failure of an enterprise in competition, productivity in the use of resources, and also as a result of identifying and using unique ways of competition that are different from competitors, which can persist for some time.

Kharitonova A.S., Myasnikov A.V. adhere to the same resource approach. They reveal the concept of competitive advantage by the characteristics and properties of the product, which create for the enterprise a certain superiority over its direct competitors. Kharitonova A.S., Myasnikov A.V. note that competitive advantages are a concentrated manifestation of superiority over competitors in the economic, technical, organizational spheres of the enterprise’s activity, which can be measured by economic indicators, and also rightly distinguish them from the potential of the enterprise, since competitive advantage, unlike the potential of the enterprise, is assessed by the result of real and obvious customer preferences.

Balabanova I.V. Competitive advantages means a set of key success factors that allow an enterprise to secure a winning position in the market in the long term. Based on this definition, we can conclude that the role of competitive advantage comes down not simply to ensuring the competitiveness of the enterprise, but to achieving better results of market activity compared to competitors based on the offer of products and services that can to a greater extent satisfy the needs and requirements of potential consumers, make them prefer products and services of this enterprise. This approach necessitates the creation of unique products and services.

Advantage can be achieved by creating exclusive value

All this allows us to agree with the authors who believe that competitive advantage can be achieved through the creation of exclusive value. “Exclusive” means inimitable, unique, one of a kind, unusual. According to scientists, a competitive advantage—the presence of some exclusive value in a system—gives it an advantage over its competitors. Fatkhutdinov R.A. also notes that competitive advantages are those factors that already provide advantages of the object (subject) in question over competitors or provide in the future when implementing planned activities.

To summarize, we state that competitive advantage should be considered as a set of fundamental unique factors of an enterprise that positively distinguish the enterprise from its competitors and provide it with a better position than its competitors.

To clarify the essence of the competitive advantages of TNCs, it is necessary to find out the specifics of their activities.

Based on the processing of numerous publications regarding the functioning of TNCs, it has been established that the features of their activities are that:

TNCs are complex, diversified structures, which determines their complexity as an object of research;
the scale of their activities is wide, since the structural divisions of TNCs operate in dozens, hundreds of not only geographical, but also product markets;
TNCs simultaneously operate in the markets of several regions and countries, the external environment of which differs significantly both in factors and in the level of their influence, which, due to fragmentation and lack of information, makes it difficult to make informed decisions;
competition between TNCs is multidimensional in nature: from intra-industry to inter-industry and global, and its conditions are differentiated in different product markets and markets of different countries;
despite the dominant role of the international business environment, the competitiveness of TNCs is largely related to the internal properties of its functioning and the strategies that are implemented;
the dynamism of the international business environment, the acceleration of the pace of scientific and technological progress affect the level and stability of the positions of TNCs, the maintenance and expansion of which requires sustainable competitive advantages.

Features of the activities of TNCs

Taking into account the peculiarities of the activities of TNCs in the international business environment, we propose to understand the competitive advantage of TNCs as key, unique, inimitable factors in the international market that have the potential to further enhance uniqueness and ensure a high level of competitiveness of TNC products and services in all markets in which they are represented, based on meeting the growing needs of consumers more completely and better than competitors.

We believe that the exclusive advantage of Apple Inc, which lies in the constant improvement of its products based on technical and information innovations, which leads to a rapid increase in demand for products around the world, has allowed the company to increase its competitiveness, improve competitive position(one year to rise from 8th to 2nd place in the world ranking of the best brands) and increase market value company up to 153.3 billion dollars).

It should be noted that the formation of a competitive advantage is possible only if one knows the factors of competitiveness of competitors. Consequently, the identification and clarification of a competitive advantage occurs in the process of comparing the company's competitiveness factors with the competitiveness factors of other companies, and a competitiveness factor is determined or their combination can be considered a competitive advantage if they turned out to be better compared to a competitor and ensure victory, the company's primacy, its leadership in market due to the choice by consumers of goods or services of this particular company.

Processing the results of scientific research on ensuring the competitiveness of TNCs makes it possible to determine the main approaches to the formation of competitive advantages of TNCs:

Differentiation of activities and provision of synergy benefits on this basis;
expansion of TNCs through mergers and acquisitions for the purpose of growth;
gaining leadership in technology by enhancing innovation;
formation of a positive company image and impeccable reputation;
exploiting economies of scale and maintaining high product quality;
flexibility of investment policy,
placement of foreign branches near markets,
value chain management;
the optimal combination efficient use the potential of available resources;
innovation and dynamic adaptability;
increasing the efficiency of using intangible assets;
effective capital management;
improving the organization of activities of TNCs, etc.

Based on the results of processing scientific publications on this direction, it has been established that achieving competitive advantages of TNCs is possible if the necessary conditions are created and certain tools are used to create competitive advantages. We believe that the competitive advantages of a national company and a transnational one have different level significance, value, content, impact on the level of competitiveness. Taking this into account, the conditions for the formation of competitive advantages and their sources for TNCs have been determined (Fig. Most authors consider competitive advantages to be key factors for success in competition, then the competitive advantages of TNCs can also be considered factors for increasing the competitiveness of TNCs.

The authors rightly note that it is extremely difficult to ensure a competitive advantage for a significant number of tools for their formation. And in conditions of intense competition it is almost impossible. Therefore, it is advisable for business entities to rank the tools for creating competitive advantages by importance and pay attention to the most significant ones.

Pavlova V.A. quite rightly notes that at different stages of development of enterprises in the production of consumer goods, competitive advantages and the choice of development strategy are different; they also need to be taken into account when determining priority competitive advantages.

The author proposes to consider the total sources of competitive advantages for commodity producers in the following sequence:

1 – improving product quality;
2 – assortment optimization;
3 – setting prices and their market regulation;
4 – introduction of production technologies that allow the production of unique products;
5 – motivation of managers;
6 – location of raw material suppliers.

But such an order will allow the formation of competitive advantages mainly in product policy; it somewhat narrows and limits the possible set of competitive advantages. Therefore, we will focus on the most significant sources and tools for the formation of competitive advantages of TNCs in the context of globalization. Since it has been proven above that the competitive advantage of a TNC must have unique features that are different from its competitors, an important source of them is identified. Great consumer-friendly features and more product offer, including in the means of communication, product promotion on the market, methods of outpouring to consumers, the formation of brand policy, management, etc.

The next important source of competitive advantages of any economic entity, and especially TNCs, taking into account the peculiarities of the location of its structural divisions, are the resources of the economic entity: financial, technical, material, human, marketing, information, etc. The presence and sufficiency of which determine the production process and its efficiency . Since the specificity of their international business and location is an important consideration for MNCs, competitive advantage in resources and the efficiency of their use depends on the availability and proper configuration of the necessary resources. A TNC may have its structural divisions in several different countries. In which the level of qualifications of workers, the quality of raw materials, material costs of production, etc. may differ significantly and may not meet the needs of the company. In cases of non-compliance, it can lead to difficulties that will lead to a decrease in the competitiveness of the company and the loss of its gained market positions.

When offering their goods and services in different countries of the world, TNCs face two problems

One is related to the need to study national culture, traditions, foundations that determine the specific behavior of consumers in a given country, their accounting is prerequisite effective activities of TNCs. Another problem is knowledge and awareness of the real state of the market and trends in the competitive environment of a certain commodity market of one country or another. Solving these problems requires the availability of relevant, reliable, objective, full information. So, given the difficulties of obtaining and accumulating it, the information itself, its systematic nature. Depth and precision can act as a competitive advantage for TNCs in the dynamic business environment in the international arena.

The next key success factor that can form a powerful competitive advantage for TNCs is innovation, and not only product and technological innovation, but management innovation, marketing innovation, etc.

One cannot ignore such an important factor of competitiveness as the diversification of the activities of TNCs, and successful diversification can ensure the maintenance of the gained position in the market in the event of intensification of competition. And to contribute to its improvement in the international market due to the formation of a sustainable competitive advantage thanks to the active position of TNCs in the international market and the expansion of spheres of influence and sales markets.

In the context of the development of a socially oriented marketing concept, the growing attention of consumers to life safety, condition environment. And also increasing the importance corporate culture The role of using intangible assets is increasing, using them in accordance with global trends. TNCs have the opportunity to use them as tools for forming their competitive advantages.

Formation of sustainable competitive advantages of TNCs

In general, to create sustainable competitive advantages, TNCs must ensure compliance with the above conditions and make maximum use of all existing and potential sources of competitive advantage. Taking into account the specifics of its activities, the peculiarities of the development of the international business environment. Paying attention to the priority and level of significance of a particular competitive advantage, taking into account the state and trends of the market in which it operates.
On the one hand, in the context of a significant growth in the role of TNCs in the global economy, the scale and level of international competition are increasing. On the other hand, the international business environment is characterized by a high level of dynamism, uncertainty, risk and variability.

All this necessitates the formation of unique and unprecedented competitive advantages of TNCs to ensure its stable development in the international market. The main sources of formation of competitive advantages of TNCs in the context of globalization are excellent features, optimal combination and efficient use of resources, and possession of the necessary information. As well as an innovative vector of development, the creation of unique intangible assets, diversification, the active position of the company, its high flexibility and mobility, and the ability to quickly adapt to changes are justified.

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 effective implementation company 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 significant influence on the world 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 is proportional to their participation in that 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 high technology trade. 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 the globalization of business in the financial and credit sphere are the reduction of 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 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 country of origin 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 various types 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, which 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 in which the host country is located and at what level of development. For example, in Southeast Asia, innovative R&D related to computers and electronics predominates; in India, it is dominated 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 greatest number employed 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, small TNCs are often 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”.

TNCs stimulate scientific and technological progress, since most of the research work is carried out within their framework, and new technological developments appear.
TNCs stimulate the trend of globalization of the world economy, contributing to the deepening of MRI and involving host countries in international economic relations.
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.
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 on a technological basis within one industry, ensuring in both cases the economic stability and financial stability of TNCs.
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.

The main reason for such rapid development of TNCs in the second half of the 20th century. undoubtedly, is the high efficiency of their activities compared to companies operating in only one country. Let's consider the main competitive advantages that are the basis of this efficiency of TNCs:

Advantages of owning and accessing natural resources, capital and research and development (R&D) results around the world;

Horizontal diversification into different industries or vertical integration on a technological basis within one industry, ensuring in both cases the economic stability and financial stability of TNCs;

The ability to choose when locating company enterprises in different countries, taking into account the size of their national markets, rates of economic growth, prices, availability of economic resources, as well as political stability;

Low cost of financial resources due to wider opportunities for attracting them;

Economy on enterprise scale;

Providing the opportunity to use state foreign economic policy in various countries in the interests of TNCs;

The ability, through direct investment, to overcome various barriers to the introduction of one’s goods into the market of a particular country through exports;

Continuous awareness of the situation in commodity, currency and financial markets in different countries, which allows you to quickly direct capital flows to those countries where favorable conditions exist for obtaining maximum profits;

Access to qualified personnel and rich opportunities for their selection.

Factors contributing to the globalization of the economy.

Development of communications

Prompt transfer of information is the basis for the functioning of transnational companies. It is easy to see that the evolution of global corporations is inextricably linked with the evolution of communications. As new, ever faster channels of information exchange develop, more and more new aspects of global business are emerging. The latest trends are the organization by many companies of a worldwide network of centers for the development of new products, offshore programming business, and Internet commerce.

Cultural exchange and cultural alignment

Globalization and cultural exchange are interconnected and inseparable. Only a common value system makes possible the worldwide success of large corporations, and it is the arrival of companies that brings with them a piece of the culture of its country.

Undoubtedly, in the process of globalization there is a mixing and unification of different cultures. National traditions and religious differences fade into the background, leaving the universal value on the scene - the free market.

Development of transport infrastructure

The invention of container transportation significantly reduced the time and cost of cargo transportation. The transport component in the cost of overseas goods has dropped significantly. This factor has become an important incentive in the division and specialization of the world industrial production market. The phenomenon of China being the world's factory for electronics, footwear and textiles would not be possible if the cost sea freight offset the benefits of relocating production.

Interstate competition for resources

In an effort to raise the standard of living of citizens, countries are entering the global investment market, trying to offer investors the best conditions and profitability. Often, international companies are placed in much more favorable conditions than those in which local companies operate. This gives transnational corporations additional competitive advantages in the fight for new markets.

Development of the global financial and stock market.

The main partners of transnational corporations in international business over the past century and a half have become transnational banks, which also originated in developed countries and went through a long and complex evolution in parallel and even together with TNCs. An important factor in the economic independence and global influence of corporations is the developed international financial system, consisting of an extensive network of banks, commodity, financial and stock exchanges.