Transnational corporations and economic restructuring

The analysis in the previous chapters of Part Two has dealt with individual components of the competitiveness of transnational corporations (TNCs) and their potential contributions to a country’s economic performance. It is, however, one ofthe characteristics offoreign direct investment (FDI) that it is a package of assets which can, in interaction with domestic factors, produce performance-enhancing effects that extend beyond the sum of its parts. In particular, FDI can enhance a country’s ability to restructure its economy in a manner leading to higher productivity and income. This chapter examines how TNCs — in the process of improving their own competitiveness — can contribute to industrial restructuring in home and host countries and reviews some country experiences in this respect. This examination is preceded by a short introductory section outlining the link between industrial restructuring, economic performance and TNCs.

Sustainable Development Goals:

Decent Work and Economic Growth