The nature and causes of international corporations

Increase in the last decade, the scale of direct investment has led to the emergence and rapid development of multinational corporations - large companies that invest and have branches and subsidiaries in many countries around the world.

International corporations are of two kinds:

a) Transnational corporations (TNCs), in which the parent company owns the capital of one of the country;

b) multinational corporations (MNCs) in which the parent company owns the capital of two or more countries.

Most of today's multinational corporations is shaped TNCs.

Transnational corporations (TNCs) - a natural result of the development of the international division of labor, industrial cooperation and investment cooperation.

TNK education is inseparable from the export of capital. They are a tool for the implementation of the interstate movement of capital. TNK consider the entire world economy as a sphere of application of the capital.

UN statistics as TNK considered large firms with an annual turnover of more than $ 100 million. Having with branches or subsidiaries in at least six countries (the old approach). Additional indicators of TNCs are: the proportion of its sales taking place outside the home country, as well as the share of foreign assets in total assets.

Under the new approach taken by the UN to include TNK company:

1) having offices in two or more countries;
2) conducting a coordinated policy in one or more centers of decision-making;
3) The parent company controls the foreign assets are generally capital participation with a lower limit 10%)
Background of the TNC:

• internationalization of production and capital on the basis of the development of the productive forces, escalating national borders;

• Economic efficiency TNK caused large scale production in many sectors;

• encouragement of TNCs from the state, ensuring that they enter into the markets by various political, economic and trade alliances and agreements;

• Competitive advantage occurs when the vertical and horizontal integration of foreign affiliates;

• greater access to better conditions in the international capital markets.

Its development in the world in recent years have received so-called transnational a shell, or hollow, firm. Their specificity is the transmission on a contract basis, business functions, especially manufacturing, third-party contractors from different countries. Parent company reserves the only function of the overall management of the entire process from idea to sell his product to the end user.

Cost effectiveness of multinational companies is shown in the following:

- Move across national borders major industrial resources;

- Improving the effectiveness of placing the world of production factors;

- Dissemination of innovative technologies;

- Increase the skill level of the labor force;

- The creation of new jobs and improve living standards of the host country.

Interstate multilateral regulation of TNC activities carried out solely by matching the political attitudes of governments of the participating countries in the interests of national capitals.

The main objective in this area is to create a legal environment to ensure compliance with the rules and principles of TNK international legal regulation.

The difficulty lies in the fact that TNCs are not subjects of international law and its agreements with the states can not be regarded as international law.

TNCs are made in terms of organization of a large number of structural units located in different countries and have different personality.

Subsidiaries of TNCs act as independent legal entities which are established and existing under the laws of the host countries.

The provisions of the various regulatory documents and projects on the activities of transnational corporations, are grouped around the following problems associated with it:

• ensuring respect for national sovereignty TNK countries where they operate, and their compliance with the obligations of local laws, regulations and administrative provisions;

• responsibilities of TNCs to follow in their work goals, priorities and policies of the countries of their residence in the area of ​​economy and development;

• obligation to respect local social and cultural principles and values;

• Respect for the rights of TNCs rights and fundamental freedoms;

• prohibition of interference in the internal political process of TNK sovereign states;

• The prohibition of intervention in intergovernmental relations;

• responsibilities of TNCs to refrain from corrupt practices in economics and politics, as well as issues

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