Forces Shaping TNCs: An Analysis of Ownership, Location, and More

This report evaluates the forces that shape Transnational Corporations (TNCs), examining their origins, emergence, and the advantages they leverage, such as ownership, location, and internalization. It explores why countries are attractive to TNCs and the benefits they bring to both home and host nations, including job creation, capital investment, and infrastructure development. The report also addresses the limitations and challenges posed by TNCs, such as labor exploitation and capital flight. Furthermore, it analyzes the growth of the international economy, the causes of internationalization, and the evolution of open trade. The report concludes by assessing the competitive advantages TNCs offer to home economies and their impact on host economies, emphasizing their role in addressing micro and macroeconomic issues within an interdependent global landscape. The analysis draws on academic sources to support arguments about the benefits and drawbacks of TNCs in the global economy.

Evaluate the forces that shape
TNC’s.

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
Explain the three advantages by John dunning OLI (Ownership, locational,
internationalization).....................................................................................................................3
Explain why TNC’s should be attracted by countries?...............................................................3
What benefits do TNC’s bring to home country and to the host country....................................3
What are the limitations to host and home countries of the activities carried out by TNC’s......4
Explain the “growth of international economy” (include reasons for globalization and how
international economy grew?).....................................................................................................4
Discuss causes of internationalization briefly.............................................................................4
Explain how “Open trade” began?..............................................................................................4
Mention some biggest TNC’s in the world..................................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The term transnational corporations termed as the manner of the business in which the
business that function as across to the international borders by most of them have their head
office in the USA, Europe and Japan. By emerging the manner of the TNCs that have an effects
in terms of the viable sites in the developed and developing host of an economies. They are
directly affecting new trends in international business, global competitiveness on an international
markets of an economies of the states (Reginensi, and et.al., 2020). As it an essential term that
plays an essential role in the recent global trade and industry procedures to comfort the
sustainable financial development in the world economy for improving the competitiveness.
TASK
Explain the three advantages by John dunning OLI (Ownership, locational, internationalization)
 Ownership Advantage – Ownership is termed as the proprietorship of an exclusive and
valued sources that cannot certainly be imitate.
 Location Advantage – The location advantage concentrates more on physical benefits of
the host nation or nations.
 Internalization Advantage – It consider the value chain actions that are performed as
locally with their own team or subcontract it to a foreign nation.
Explain why TNC’s should be attracted by countries?
Many transnational corporations (TNCs) have been already set up their factories and
offices in other nations (Song, and et.al.,2021). The nation is a striking location to TNCs
as because the people speaks have good sense of knowledge that has strong IT skills and abilities
to work for the lower wages than individuals in many other nations.
What benefits do TNC’s bring to home country and to the host country
 TNCs have developed a job opportunities that will offered education and training to
individuals
 It relates to the additional capital that has led to the multiplier effect.
 It relates to some TNCs that have set up various plan of actions to provide new services
and facilities for local communities.

 The arrangement of the nation that has been enhanced with new roads and internet
cabling as effectively.
 TNCs has pays tax to the government that can be spent on growth of the projects.
What are the limitations to host and home countries of the activities carried out by TNC’s.
 Labour exploitation – TNCs decided to move their manufacture as into short wages
nations or developing nations to get anticipate to abuse cheap labour.
 Removal of capital – TNC can bring jobs, technology and insert capital to short term
wages nations as easily. By this it will be leave easily (Liu, and et.al., 2020). All capital
of TNC will not stay in host nation for the longer period of the time but it can be removed
anytime by TNC.
Explain the “growth of international economy” (include reasons for globalization and how
international economy grew?)
The growth of international economy will termed as the regular yearly rate of development
in GDP as in between to the first and the last year over the fix period of the time. This
development rate will shows the trend in the regular level of GDP as over to the period and will
neglect any variations in the GDP as around to the trend as effectively.
Discuss causes of internationalization briefly.
 Foreign competition in the host nation has been growing as rapidly.
 Rapid maximisation in foreign demand for manufactured product by which visitors will
get influence to it.
 The pace of the technical development that has enhanced as sources of new techniques
and methods that have diffused.
 Changes in global political and economic condition that have created a new sort of the
challenges as effectively.
Explain how “Open trade” began?
Open trade is the term that will applies to the theoretical trade or transaction that cannot
been fastened (Isik, Dodder, and Kaplan, 2021). With the stock might be figure that is to be
retailed as per to the open trade or the trade that is open until the stock as actually that is sold and
the trade or the transaction to completed or closed.

Mention some biggest TNC’s in the world.
General Electric of the United States is the world´s largest transnational corporation (TNCs),
as evaluated by foreign resources as per to the Daewoo Corporation of the Republic of Korea
that is the largest TNC from growing nation (Wong, Hensher, and Mulley, 2020). As per to the
World Investment Report 1998: Trends and Determinants (WIR98) that are released today by the
United Nations Conference on Trade and Development (UNCTAD).
CONCLUSION
From the above mentioned report it has been concluded that, the TNC will brings the
competitive benefits for home financial prudence that are how are they valuable or aggressive to
the host nation as effectively. TNC’s can also solve the micro and macro-economic problems and
issues in the nation.

REFERENCES
Books and Journals
Reginensi, D., and et.al., 2020. Role of Region-Specific Brain Decellularized Extracellular
Matrix on In Vitro Neuronal Maturation. Tissue Engineering Part A, 26(17-18), pp.964-
978.
Song, Y., and et.al.,2021. Self-Assembling Allochroic Nanocatalyst for Improving Nanozyme-
Based Immunochromatographic Assays. ACS sensors. 6(1). pp.220-228.
Liu, L., and et.al., 2020. Application of FRET Biosensors in Mechanobiology and
Mechanopharmacological Screening. Frontiers in Bioengineering and Biotechnology, 8,
p.1299.
Isik, M., Dodder, R. and Kaplan, P.O., 2021. Transportation emissions scenarios for New York
City under different carbon intensities of electricity and electric vehicle adoption
rates. Nature Energy. 6(1). pp.92-104.
Wong, Y.Z., Hensher, D.A. and Mulley, C., 2020. Mobility as a service (MaaS): Charting a
future context. Transportation Research Part A: Policy and Practice, 131, pp.5-19.