World Investment Report 1993

Transnational Corporations and Integrated International Production

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There are over 37,000 transnational corporations in the world with over 170,000 foreign affiliates. This report presents for the first time ever data on the largest 100 non-financial transnational corporations ranked by foreign assets. It describes and analyses the continuing expansion of transnational corporations, the regionalization and globalization of firms, the emergence of an integrated international production system and some legal and policy implications of these developments. The wealth of information presented is complemented by over 80 statistical tables and charts related to the operations of transnational corporation.



Investment policies

World economic interdependence today is increasingly production-based, not just trade-based as it was in the 1950s and 1960s. The change owes much to advances in transport, information and communications technology, and the liberalization of financial markets. Those advances also propelled the spread of transnational corporations (TNCs) which, in turn, have become prominent agents of integration. Today, TNCs in the largest home countries have internationalized their value-added activities and internalized the exchange of goods and services to such a degree that global sales of affiliates are considerably larger than exports in delivering goods and services to markets world-wide. In addition, the functional breakdown of the value-added chain is creating a new enterprise-level division of labour spanning national boundaries. Equally significantly, research and development is more and more carried out through intra- and interfirm technology networks on a regional or world scale (TCMD, 1992a, ch. VI). Increasingly, therefore, international economic transactions need to be seen from the perspective of foreign direct investment (FDI) (TCMD, 1992a, part III), and Governments have to adapt to this new reality. Some of the challenges for public policy were discussed in chapters VIII to X; here, the focus is on policies influencing FDI flows.


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