Economic advantages of transnational corporations. Competitive advantages of Chinese TNCs

29.09.2019

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 the key to competitive advantage in markets;

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

§ access to foreign natural resources to reliably supply our own 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 specific features 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. As a rule, large companies have a well-known brand 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, by all 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. This 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 in the world market and control a significant part of international trade.

Automated information Technology as a tool to improve the efficiency of banking activities

The purpose of using modern automated banking systems is to ensure the growth of bank profits, as well as the unhindered development and expansion of business in the future...

Analysis of the activities of Gromit LLC

Nowadays, a very promising and rapidly developing type of service provision is freight transportation, as well as loader services. Transportation of heavy and large-sized cargo is carried out on the basis of permits...

Leading financial and industrial groups in the petrochemical complex of the Russian Federation

What is the process of concentration of capital in financial and industrial associations from the point of view economic theory? Industrial capital serves the production sector, banking capital, provides the credit sector...

Information systems in economics

Leasing as an effective way to renew fixed assets of an enterprise

The very meaning of using leasing in economic activity, reflected in its functions, lies in the optimization and rationing of the use of resources...

Small business: features, advantages, foreign experience and problems of formation in Russia

Small businesses are included to a limited extent in economic structure, competitive environment and the social division of labor. Moreover, its role in modern dynamic life is steadily increasing. As the experience of developed countries shows...

Cloud computing: assessing economic attractiveness

It was previously mentioned that in the forecasts of IT specialists, “cloud technologies” are promising developments, the development of which can incredibly increase the entire level of provision of IT services. Naturally...

Justification of the economic efficiency of production of non-firing iron-carbon compositions

Until now, the main amount of ferrous metals (more than 98%) is produced using the two-stage “cast iron-steel” scheme. According to this scheme, iron from ore is almost completely converted into cast iron during blast furnace smelting...

Features and prospects of corporatization of enterprises

JSCs have the following advantages: a) for participants - this limited liability for the activities of the company, ease of entry and exit through the acquisition and alienation of shares, the possibility of transferring shares by inheritance...

Efficiency indicators of centralized procurement in industry

The novelty of the presented solution lies in the fact that three key indicators have been developed that allow a comprehensive assessment of the impact of procurement processes on business. This takes into account the dialectical relationship between the effects...

Subject and method of economic theory

In the most general form, property relations in the economic sense, as already noted, express the nature of production relations, which is revealed in the system of economic laws as an essence of a deeper order...

Market as an economic system

The market mechanism carries out its functions most effectively in conditions of economic freedom, which implies freedom of entrepreneurship, freedom of movement of resources in different areas of application, freedom of pricing...

Factors for increasing the economic efficiency of industrial production

Concentration of production - concentration of production in ever larger enterprises. The desire of production to concentrate on large enterprises is due to the economic advantages of large enterprises...

Financial and industrial groups

Members of the financial and industrial group - legal entities carrying out any types of economic activity not prohibited by the legislation of the Republic of Belarus, and producing goods (work, services)...

Financial and industrial groups in the Russian economy

Large integrated structures set the vector of economic development. Such structures act as the basis for supporting production stability in developed countries...

Modern multinational corporations have a great influence on world economy generally. In one word, this influence is “stimulating” and “facilitating”:

TNCs stimulate scientific and technological progress, since most of the research work is carried out within their framework, new technological developments appear;

TNCs stimulate the trend of globalization of the world economy, involving host countries in international economic relations. Thanks to them, there is a gradual “dissolution” of national economies into a single world economy, as a result of which a global economy is created;

TNCs stimulate the development of global production. Being 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 in them, and therefore the world economy as a whole;

TNCs contribute to the optimal allocation of resources and location of production;

TNCs contribute to expanding the boundaries of the international division of labor and international cooperation.

But, nevertheless, the development and increase in the number of transnational companies affects not only the world economy as a whole, but also the development of individual countries. International companies for each specific state are representatives of the world economy and must have autonomy limited by relevant rules, operating within certain legal and institutional frameworks.

Transnational companies are considered the main factors in shaping the competitiveness of countries and realizing their competitive advantages in international markets. Thus, the prosperity of the country largely depends on the success of TNCs operating on its territory.

Host countries benefit from influxes of investment in many ways. Firstly, the widespread attraction of foreign capital helps to reduce unemployment in the country and increase state budget revenues. With the organization of production in the country of those products that were previously imported, there is no need to import them. 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. Secondly, the benefits of TNCs in the host country are also observed in qualitative components. The activities of TNCs force the administration of local companies to make adjustments to process, the established practice of industrial relations, allocate more funds for the training and retraining of workers, pay more attention to the quality of products, their design, and consumer properties. Most often, foreign investments are driven by the introduction of new technologies, the release of new types of products, a new management style, and the use of the best from foreign business practices.

Since transnationalization increases both the average profit and the reliability of its receipt, holders of TNC shares can count on high and stable income. Workers serving at TNC enterprises take advantage of the formation of a global labor market, moving from country to country and without fear of being left without work.

Most importantly, as a result of the activities of TNCs, the import of institutions is carried out - those “rules of the game” (labor and antitrust laws, tax principles, contracting practices, etc.) that were formed in developed countries. TNCs objectively increase the influence of countries exporting capital on countries importing them. For example, German firms subordinated almost all Czech business in the 1990s, as a result of which, according to some experts, Germany established much more effective control over the Czech economy than in 1938-1944, when Czechoslovakia was captured by Nazi Germany. Similarly, the economies of Mexico and many other Latin American countries are controlled by American capital.

However, the centralized regulation of the world economy carried out by TNCs also gives rise to many acute problems, which primarily arise in developing and underdeveloped countries:

Fierce competition from TNCs to local companies;

The possibility of imposing unpromising directions on companies of the host country in the international system of division of labor, the danger of turning the host country into a dumping ground for outdated and environmentally hazardous technologies;

Capture foreign companies the most developed and promising segments of industrial production and research structures of the host country. Squeezing out national business and possible monopolization of local markets;

Violation of the legislation of the host country. Thus, by manipulating the transfer pricing policy, TNC subsidiaries circumvent national legislation, hiding income from taxation by pumping it from one country to another;

Establishing monopoly prices, dictating conditions that infringe on the interests of developing countries;

Transnationalization of activities reduces economic risks for corporations, but increases them for host countries. The fact is that transnational corporations can quite easily move their capital between countries, leaving a country experiencing economic difficulties and moving to more prosperous ones. Naturally, under these conditions, the situation in the country from which TNCs are abruptly withdrawing their capital becomes even more difficult, since disinvestment (massive withdrawal of capital) leads to unemployment and other negative phenomena.

Thus, each country that hosts TNCs on its territory must take into account all the possible advantages and disadvantages of the influence of transnational capital on its economic and political system in order to maximize the degree to which the national interests of the state and its citizens are ensured. Currently, host countries, both developed and developing, generally approve of activities transnational corporations on its territory. Moreover, there is competition in the world between countries to attract foreign direct investment, in the process of which transnational corporations receive tax discounts and other benefits.

It is impossible to evaluate the activities of transnational corporations only from the worst side. TNCs contribute international division labor, production and development of science and technology. Even though wages in the company's branches is lower than in the home country, it is still often quite high for developing countries, and, in addition, such large companies provide their employees with certain social guarantees. Sometimes underdeveloped countries themselves open their markets to large international companies, realizing their advantages.

The interests of transnational corporations and the countries in which they are based usually coincide. Transnational corporations allow the state to gain access to the resources of other countries. In addition, products manufactured abroad will not be subject to duties by the state where these products were produced.

Table 1.1 shows both the positive and negative consequences of MNC activities for the host country; for a country that exports capital; for the entire world economy.

Table 1.1 – Consequences of TNC activities

Positive consequences of TNC activities
For the host country
Obtaining additional resources (capital, technology, management experience, skilled labor)	Importing "rules of the game"	Stimulating globalization
Growth in production and employment	Growing influence on other countries	Growing unity of the world economy
Stimulating competition	Revenue growth	Increasing global productivity
Receipt by the state budget of additional tax revenue	Improving the standard of living of people around the planet
Negative consequences of TNC activities
For the host country	For a country exporting capital	For the entire world economy
External control over the choice of a country’s specialization in the world economy	Reduced government control	The emergence of powerful centers of economic power acting in private interests that may not coincide with universal human interests
Displacement of national business from the most attractive areas	Special investment conditions (training local personnel, using local semi-finished products, etc.)
Growing instability of the national economy
Evasion big business from taxes

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;
organizational structure which are focused on large-scale economic activities 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 operations 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. Essentially TNCs in everything to a greater extent determine international policy.

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 and level of development of the host country. For example, in Southeast Asia, innovative R&D related to computers and electronics predominates, in India - in the services sector (especially software), in Brazil and Mexico - in the production of chemicals and transport equipment.

For multinational corporations conglomerate type in order to determine their specialization, the so-called industry A is distinguished, which the United Nations characterizes as having a significant amount of foreign assets, the largest number of 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, 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”.

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 research and development results around the world.
Horizontal diversification into different industries or vertical integration across technological principle within one industry, ensuring in both cases economic stability and financial stability TNK.
Possibility 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, and 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.

Having a universal industrial base, TNCs pursue a production and trade policy that ensures highly efficient production planning, commodity market, a dynamic policy in the field of capital investment and research work on a national, continental and international scale for all divisions (branches) of the parent corporation as a whole.

The main sources of effective activity of TNCs are:

- taking advantage of ownership of natural resources (or access to them), capital and especially R&D results;
- the possibility of optimal location of their enterprises in different countries, taking into account the volume of their domestic market, the rate of economic growth, prices and qualifications of the workforce, the cost 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 network of TNCs;
- use of financial resources from all over the world for one’s own purposes;
- constant awareness of the commodity, currency and financial markets in different countries; rational organizational structure of TNCs;
- international management experience.

It is important to note that TNCs create intracorporate markets that are not governed by market laws. Intra-corporate trade is called quasi-trade, which means that TNCs hinder the development of global trade turnover.

The dynamics of intra-corporate trade turnover are explained:

- greater profitability of this trade;
- most shortcut to penetrate foreign markets;
- the ability to speed up the process of concluding and using commercial contracts, and therefore more effectively manage commercial and sales activities.

IN to the greatest extent US multinationals take advantage of this. Their share of turnover is on average 45% of their total turnover.

By manipulating transfer pricing policies, TNC subsidiaries operating in different countries skillfully bypass national laws in order to hide income from taxation by pumping it to another industry, from one country to another, and to the TNC headquarters in developed countries. As a result, the effect of the tendency of the rate of profit to decrease is neutralized, and the main goal of capital is achieved - profit.

IN modern conditions TNCs are increasingly becoming part of international consortiums and concerns, extending their influence to multi-industry complexes. Thus, they have the opportunity to regulate the market, taking into account its needs, creating demand for their products even before production begins.

Today they often talk about the unification of TNCs and TNB, called a transnational financial oligarchy. Thus, TNB act financial basis the development of TNCs, which is effectively served by their branches, the network of which is spread throughout the world (more than 5 thousand branches of 140 TNBs accounted for in the mid-1980s); in the 1990s this process accelerated even more.

Large metropolises, which are an ideal “habitat” for TNCs and the most important bases of transnational capital, are beginning to play an increasingly active political and economic role. Residents major cities are gradually developing a new international subculture. They watch the same worldwide information programs, are brought up on the same standards of education and behavior, live in a single accelerated rhythm, and much more often than others participate in the activities of international organizations, TNCs and TNBs.

It should be noted that many large cities are larger than average national states in terms of the scale of their economic activity. For example, Tokyo produces twice as many goods and services as Brazil; Chicago's production scale is comparable to Mexico, with half of its GDP produced in the metropolis of Mexico City. Large cities are becoming independent forces in the economic and political spheres and in their growing ambitions they are actively pursuing an alliance with TNCs prepared at the sociocultural level. The creation of alliances between TNCs and megacities, where the “core” of the corporation is located, represents new trend development of the world economy.

In modern TNCs, thanks to new computer technologies, a network organization prevails with bases of transnational capital and management nodes in major cities various countries. The development of global communication networks and global TNCs with a network management structure took place in parallel, and these processes certainly complemented and stimulated each other.

State support for the parent company plays a major role in the successful activities of TNCs. For example, the world's three largest oil and gas corporations are state-owned: Saudi Aramco (Saudi Arabia), Gazprom ( Russian Federation) and the National Iranian Oil Company (Iran). The state can provide financial support For their companies seeking to enter foreign markets, in particular, Chinese and Indian corporations have the opportunity to receive subsidies, preferential loans and government guarantees when conducting external operations.

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 their 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 general system values make possible the worldwide success of large corporations, and it is the arrival of companies that brings with them a piece of the culture of her 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 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 economic independence and global influence of corporations is a developed international financial system, consisting of an extensive network of banks, commodity, financial and stock exchanges.