Multinational corporations and the global economy

Автор работы: Пользователь скрыл имя, 11 Мая 2014 в 15:55, статья

Краткое описание

Nowadays the multinational corporations are the most flexible actor which supports
globalization. So, I consider that is important to analyse the evolution of these corporations.
Multinational corporations operate at the crossing point between production, international trade and foreign investments. These companies are in the middle of the debates about economic globalization. They are known as transnational corporations or as multinational firms too. Multinational corporation is a firm which control and organize production using plants from at least two countries. The number of multinational corporations is about 63000. They have 700000 branches in other countries. These multinational corporations and their branches have 25% from world output and 86 millions of labour.

Вложенные файлы: 1 файл

Чубенко ( статья).docx

— 19.00 Кб (Скачать файл)

MULTINATIONAL CORPORATIONS AND THE GLOBAL ECONOMY

Чубенко А.Ю.,

Cпециальность «Менеджмент»

Cтудент ДММ-204,

Научный руководитель – Жидкова О.Н.,

преподаватель кафедры ИЯ

 

Nowadays the multinational corporations are the most flexible actor which supports

globalization. So, I consider that is important to analyse the evolution of these corporations.

Multinational corporations operate at the crossing point between production, international trade and foreign investments. These companies are in the middle of the debates about economic globalization. They are known as transnational corporations or as multinational firms too. Multinational corporation is a firm which control and organize production using plants from at least two countries. The number of multinational corporations is about 63000. They have 700000 branches in other countries. These multinational corporations and their branches have 25% from world output and 86 millions of labour.

The activity of multinational corporations supports economic globalization. But their impact on developing economies isn’t a positive every time. Multinational corporations deals with economic efficiency and exploit the scale economies. As a result, their branches migrate from those countries which have strict regulations about corporations to other countries with a permissive legislation. In order to break this process, the developing countries are forced to reduce the restrictions for multinational corporations connected with taxes, labour and environment protection.

In world economy, we can assist to a race for decreasing restrictions of the developing countries against multinational corporations, in order to obtain advantages for their citizens as a result of branches’ place to their national territory. Moreover, we talk about a race to the bottom, which means progressive migration of the capitals and technologies from countries with high levels of wages and regulations to other countries with regulations which are more favourable for multinational corporations.

 But for many developing countries, multinational corporations represent the lowest bad thing which they can select. For these countries, the multinational corporations create new jobs, develop infrastructure and stimulate the demand growth.

On the one hand, there are a lot of favourable factors for acceleration of the race to the bottom. One of these factors is mobility. The multinational corporations are able to migrate across national boundaries. This process is easy in those countries in which national boundaries control is minimal. Another factor is the decrease of taxes and wages in other countries in order to attract branches of international corporations. At last, we can mention the decrease of input prices and the relaxation of restrictions against multinational corporations.

On the other hand, there are new favourable conditions for multinational corporations’ branches placement. The first condition is goods’ homogeneousness. The companies which produce the same good have the same internal structure of the costs and are obliged to compete one against other using marginal costs and relative advantages.

The international corporations try to place their branches in those countries which have the lowest costs. These costs include the environment protection regulations too.

Other elements which are able to influence branches’ placement are transactional and investment costs. The changes of the average costs are no immediately effects on prices’ level, the wages growth don’t affect immediately multinational corporations and supply isn’t not perfect adapted to the evolution of the relative prices.

As a result, companies move their placement with the same speed as relative costs modification in order to obtain a financial advantage. Although, the change of a location for multinational corporations means high costs too. When the production process use high costs and intensive capital the change of firm location is harder.

Nowadays, the evolution of multinational corporations is powerful influenced by intergovernmental, regional and world agreements.

On the other hand, the world organisations are influenced by world powers: GATT and IMF by U.S.A., E.U. by France and Germany, OPEC by Arabia. These countries imposed specific conditions at international level which are favourable to their national companies. The same countries militated for special international agreements’ implementation (Multi-fibres Accord, for example), agreements which are favourable to U.S.A. and E.U. in their competition fight with similar companies from Asia. Other international agreements were signed between U.S.A., U.K. and Japan in order to develop bank system and to promote investments in tertiary countries. All these agreements support the greatest world economic powers’ interests. Another interesting phenomenon is the cascade movement of the multinational corporations from their own country to another country which has costs’ advantages, and after that to other country which has greater costs’ advantages and so on.

On the other hand, global policy is the result of the combination between national policies and the influence of pressure groups. For example, Multi-fibres Accord was imposed as a result of American textile companies’ influence and of American textile trade union pressure.  Environment regulations are an effect of the activities of Green Peace or Environment.

Multinational corporations try to implement new higher international standards. Moreover, these corporations are able to impose themselves some regulations in order to avoid greater restrictions from the governments in those countries in which they operate. 

Multinational corporations exploit host countries and their inhabitants because they capitalize all revenues which are obtained from a location, they migrate in other country which offer greater advantages for multinational corporations and because these corporations follow only their own interests. 

In order to protect their economies against multinational corporations, developing countries can use specific instruments like the following: to close national boundaries, to harmonize national policies with multinational corporations’ activities, to support civic active groups for better life standards and environment protection or to ensure a efficient public-private partnership in order to establish high standards for international corporations. These standards are economic, social and environmental.

As a result, international corporations have to reconsider their activity standards in order to grow up them. An interesting example is Shell Corporation which becomes a participant to environment  and social programs as an effect of the actions its interests in Nigeria and the North Sea.

Practically, multinational corporations will never be the promoters of global justice but they can be forced to change their standards in order to ensure world progress.

We can conclude that our world is not able to develop itself without multinational corporations’ support. Multinational corporations have the most important trade transactions and sells. They become an important pole of power for economic world.

 

 

 

Литература:

    1. Dunning, J.N. (2003), Re-evaluating the Benefits of Foreign Direct Investment, International Thomson Business Press, London/
    2. Grimwade, N. (2000), International Trade: New Patterns of Trade, Production and Investment, Rouledge, London.
    3. http://www.referenceforbusiness.com/index.html

 

 


Информация о работе Multinational corporations and the global economy