United Nations Globalization Transnational Corporations Mi chaelM ori or tm e ECLA C U N CTA D I ens ve Tr ni Cour e on nt i ai ng s I er i nt natonalI nves m entA gr ent t eem s Por ofSpa by variablepitch337

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									United Nations

Globalization & Transnational Corporations
Mi chaelM ori or , tm e
ECLA C
U N CTA D I ens ve Tr ni Cour e on nt i ai ng s I er i nt natonalI nves m entA gr ent , t eem s Por ofSpai t n, Trni & Tobago, i dad 16 Sept ber2003 em

Contents
• Are TNCs Important? 2. TNC strategies and motivations to invest 3. One of the Principal Effects of TNC Operations
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

1. Are TNCs Important?

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Some TNCs are bigger than some countries
measured by value added or GDP, 2000, billions of dollars
Chile ExxonMobil Pakistan General Motors Algeria Peru Czech Republic New Zealand United Arab Emirates Bangladesh Hungary Ford Motor DaimlerChrysler Nigeria 0 10 20 30 40 48 47 46 44 42 41 50 60 70 80 53 53 51 51 56 63 62 71

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Indicators of the Importance of Transnational Corporations in the Globalization Process
Foreign direct investment: at least 75% of world flows come from TNCs
25%

TNCs
75%

Others

International trade: 67% of all exports are directly related to TNCs through intrafirm operations or trade with third parties
Non-TNC trade
33% 34% 33%

Intrafirm operations

TNC trade with third parties

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

FDI Largest Source of External Finance to Developing Countries
Total resource flows to developing countries, by type of flow, 1990-2002, $ billions

350 300 250 200 150 100 50 1990 1991 1992 1993 0 -50
Portfolio flows FDI inflows Official flows

Total resource flows

1994

1995

1996

1997

1998

1999

2000

Commercial bank loans

2001

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

02

20

Indicators of International Production and Investment, 1982-2002
billions of dollars, constant prices

Item Sales of affiliates Gross product of affiliates Total assets of affiliates Exports of affiliates Employment of affiliates (thousands) Transfrontier Mergers & Acquisition FDI inflows FDI outflows

1982 2 541 594 1 959 670 17 987 .. 59 28

1990 2000 5 479 1 423 8 759 1 169 23 858 151 203 233 15 087 2 807 23 460 2 594 51 013 1 144 1 393 1 201

2001 18 517 3 495 24 952 2 600 53 581 601 735 621

2002 17 685 3 437 26 543 2 613 53 094 370 651 647

Business cycle or end of an era?
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

The Top 20 Non-financial TNCs, 2002
the top 20 by foreign assets are different from the top 20 by global or regional sales
Rank Foreign Assets 2001 (UNCTAD) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Rank Sales 2002 (Forbes 57 9 5 150 51 2 6 3 4 14 67 8 47 146 19 12 463 284 29 99 Rank Sales Top 50 2001 LAC (AE) 24 6 3 12 41 1 8 TNC Country UK USA UK Fran Germ USA. USA USA UK/Hol Fran Fran Japan Italy Spain Germ USA HK,China Aust Japan Germ Industry Foreign Assets ($ millions) 187 792 180 031 111 207 91 120 90 657 89 426 81 169 75 379 73 492 70 030 69 345 68 400 48 749 48 122 47 480 44 943 40 989 35 650 35 257 33 990

Vodafone General Electric BP Vivendi Universal Deutsche Telekom AG Exxon Mobil Corp. Ford Motor Company General Motors Royal Dutch/Shell Group Total FinaElf Suez Group Toyota Motor Corporation Fiat Spa Telefónica SA Volkswagen Group Chevron Texaco Corp. Hutchison Whampoa Ltd. News Corporation Honda Motor Co. Ltd. E.On

Telecom Elec. Machinery Petroleum expl./ref./distr. Diversified Telecom Petroleum expl./ref./distr Automotive Automotive Petroleum expl./ref./distr Petroleum expl./ref./distr Electricty, gas, water Automotive Automotive Telecom Automotive Petroleum expl./ref./distr Diversified Media Automotive Electricty, gas, water

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Profile of the 100 Largest TNCs, 2000
•90 come from the “Tríad” (Europe, North America, Japan) • 5 come from developing countries • Half undertake the same four basic activities
! automotive ! electronic and electrical equipment ! petroleum: exploration, production and distribution ! pharmaceuticals

• These 100 largest account for
! 11 percent of the external assets; ! 14 percent of the total sales; and y ! 14 percent of total employment
Fuente: UNCTAD World Investment Report 2002

…of all TNCs!

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Largest FDI Downturn in 30 Years
Global inflows of FDI, 1993-2002, by groups of countries $ billions

1 600 1 400 1 200 1 000 800 600 400 200 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Developed countries Developing countries Central and Eastern Europe World

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Uneven FDI Downturn in Developing Countries
Inflows of FDI to developing countries, 1995-2002, by region $ billions
250

Developing countries
200

150

Asia and the Pacific

100

Latin America/Caribbean
50

China LDCs
0

Africa

1995

1996

1997

1998

1999

2000

2001

2002

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Are TNCs important?
"Some are as big as countries (measured by V/A) "They are quite concentrated by size and activity. "They now represent the principal source of external finance for developing countries "They dominate international trade and investment "FDI is but one aspect of their operations "Their operations have strong impacts on developing country economies "They have become the principal economic agents and their decisions have important consequences
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

2. TNC strategies and motivations to invest

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

The principal strategies of the TNCs
Strategy / Sector Natural resourceseeking Petroleum / gas Minerals Market-seeking (national or regional) Efficiencyseeking Strategic elementseeking Pharmaceutical Chip design

Goods

Automotive Food products Tobacco Beverages Electric equipment

Automotive Electronic Apparel

Services

Transportation of natural resources

Finance Telecommunications Retail trade Distribution of electricity

Logístics Regional HQ

R & D Centers

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Shifts in these strategies reflect changes in the international business environment
s or ct Fa
! Trade and investment liberalization ! Technological change ! Economic recession ! More intense competition

! Refocusing on core activities and the increased use of outsourcing ns ! Increase specialization and o cti a internationalization of activities C TN ! Search to reach greater economies of scale and to reduce other costs beyond production
Expans on ofFD It s i hat eeks t i eas efi ency! o ncr e fci
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

The Major TNC Export Systems in the Developing World
Buyer driven, strong local Low technology presence, wage determined, widely spread but not universal Supplier (TNC) driven, some local Medium technology presence, capability determined, few regions Supplier (TNC) driven, low local High technology skill presence, and wage determined, globalized and integrated, very few countries
ELECTRONICS

APPAREL

AUTOMOBILES

South/ South East Asia; North Africa, Turkey; Mexico, Caribbean Basin,

Mexico with NAFTA; Central Europe with EU; Argentina with Brazil; ASEAN group

Korea & Taiwan; Malaysia, Singapore Thailand & Philippines; Mexico, Costa Rica

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Source: S. Lall, Oxford

Case 1: a leader’s strategy- Intel
the principal semiconductor companies in the world, 2001 Country of origin USA Japan Japan USA Europe Korea USA Japan Europe Europe Sales 2001 $ bn 22.73 7.22 6.95 6.67 6.32 5.10 4.95 4.68 4.64 4.36 Rank 2001 1 2 3 4 5 6 7 8 9 10 Rank 1983 7 5 3 2 1 4 10 TNC Intel Toshiba NEC Texas Instruments STMicroelectronics Samsung Motorola Hitachi Infineon Philips Sales 2000 $ bn 29.69 11.03 10.90 10.28 7.76 10.57 7.88 7.38 6.84 6.31 Sales 1983 $ bn 0.7 0.9 1.3 1.6 1.6 1.0 0.5

Total top 10 Semiconductor industry
Source: http://www.intel.com

73.61 139.0

108.63 204.4

9.4 17.4

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Intel’s principal technological advantage:
the number of transistors it crams onto its microprocessors

Intel Pentium 4 (0.13 microns)
60000000 50000000 40000000 30000000 20000000 55000000

Intel 486 Intel 4004

10000000 2300 0 1971
Source: http://www.intel.com

1200000 1989 2002

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Intel’s ISIP
•

Source: http://www.intel.com

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Intel’s plants in the USA
Site / Employees / Year constructed Functions / Products Present Process Technology (microns) n.a. 0.25, 0.35 0.13 0.13 n.a. 0.18 n.a. 0.13 0.13, 0.18 Wafer Size (mm) n.a. 200 200 300 300 200 n.a. 200 200 Post-2002 process (microns) Increase 0.18, 0.13 0.10 Under construction 0.13 flash

Oregon 1978 1992 1996 1999 2003 Arizona 1996 1999 2001 California 1988 New Mexico 1980 1993 2002 Massachusetts 1994 Washington 1996 Colorado 2001

15,000 Manufacture: motherboards Fabrication: logic & flash Fabrication: logic Fabrication: logic Fabrication: logic (desarrollo) 10,000 Fabrication: logic Assembly and testing Fabrication: logic 8,500 Fabrication: logic, flash memory (development) 5,500 Fabrication: memoria flash Fabrication: logic, flash Fabrication: logic 2,700 Fabrication: logic 1,400 Manuf. System Products 1,064 Fabrication: flash memory 0.18 200 0.13 n.a. n.a. 0.28, 0.35, 0.50 200 0.13 0.35 0.18, 0.25 0.13 150 200 300 Finish 0.13 Open

Source: http://www.intel.com Factors: technology, wafer size, internationalización Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Intel’s plants in the rest of the world
Site / Empoyees / Year constructed Functions / Products Products Wafer Size (mm) 150-200 150-200 200 200 150-200 200 200 200 300 150 200 200 200 150-200 150-200 Post- 2002 program (mm) Design boards 300

Malaysia 1988 Penang 1994 Penang 1996-97 Kulim 1997 Penang

7,790 Assemble Assemble Assemble Assemble and and and and test test test, manufacture test Logic, computer products Logic, computer products Logic, computer boards

Philippines 5,984 1979-95 Manilla 1997 Cavite 1998 Cavite Ireland 1993-98 Leixlip 2004 Leixlip
3,400

Assemble and test Assemble and test Assemble and test Fabrication: logic Fabrication: logic Fabrication: logic, flash Fabrication: logic Assemble and test Assemble and test Assemble and test Assemble and test

Flash memory Logic Flash memory 0.18, 0.25 n.a. 0.35, 0.50, 0.70, 1.0 0.18 Logic Logic Flash memory Logic

300 Under Constr. 300 300 -

Israel 2,300 1985 Jerusalem 1999 Qiryat Gat Costa Rica 1,845 1997 San José 1999 San José China 1,227 1997 Shanghai 2001 Shanghai

Factors: fabrication / assembly, wafer size, internationalization Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Source: http://www.intel.com

Case 2: The strategy of a followerPhilips Consumer Electronics
Obliged to consolidate its production system in face of increased competition Shift from a system of local marketseeking production centers to an efficiency-seeking international system of production

1980s
>100

1990s
36

2000
14

Local

Regional

Global

Consumer Industrial Strategy of Philips

Source: http://www.philips.com

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Philips’ ISIP

Kwidzyn Bruges Szekesfehervar Szombathely Dreux Hasselt Juarez

Beijing Suzhou Shenzhen Chungli

Manaus

Fuente: http://www.philips.com

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Philips’ Goals: 1. Improve its competitiveness

By way of:
– Improving the quality of and confidence in its products – Cutting shipping time – A more predictable logistical system
Consumer Industrial Strategy of Philips

Fuente: http://www.philips.com

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Goal 2. Maximize financial income
Consumer Industrial Strategy of Philips

Plant

Permanently improve the rollover of assets and reduce the cost of the integrated supply chain by way of: – Increased “outsourcing” – Reduction in number of suppliers – Standardization of products and components – Developing a global range of products Source: http://www.philips.com
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Consumer

And there are other similar examples
• Telecommunications
– leader: Nokia • Fewer but better production – Ericsson, Alcatel, Siemens, plants Motorola, Sony • Close plants in less competitive – leader: Toyota – GM, Ford, Volkswagen, DaimlerChrysler
sites • Expand plants in more competitive sites • Increase use of “outsourcing” (manufactures and services)

Principal elements of restructuring strategies:

• Automotive

Opportunities for developing countries to play a role in these ISIP and others!
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Global Value Chains
Technology Production
P ro c u re m e n t lo g is tic s M o d u le p ro d u c tio n S y s te m p ro d u c tio n F in a l a s s e m b ly T e s tin g Q u a lity c o n tro l P a c k a g in g In v e n to r y m a n a g e m e n t

Marketing
D is trib u tio n lo g is tic s W h o le s a le s a le s R e ta il S a le s A d v e rtis in g B ra n d m anagem ent A fte r -s a le s s e rv ic e

D e s ig n R & D O r g a n iz a tio n a l p ra c tic e s P ro d u c t te c h n o lo g y T ra in in g

i.e. Intel, Nokia

i.e. Toyota

i.e. The Limited

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

So, how do TNC decisions affect developing countries?
" by way of their corporate strategies: i.e. seeking natural

resources, markets for manufactures or services, efficiency, strategic elements, etc. and their situation as leaders or followers " traditional strategies: natural resource-seeking (X), marketseeking for manufactures (ISI) " modern strategies: efficiency-seeking (X), market-seeking for services, strategic element-seeking " ISIPs are parts of GVC and can be driven by technology, production or marketing functions " "FDI in ISIPs is redesigning fundamental aspects of the international economic relations, especially from the production, foreign trade and international competitiveness perspectives " FDI in previously closed or restricted services is changing the systemic competitiveness of many national economies
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

3. One of the Principal Effects of TNC Operations

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

International trade: change in its composition, 1976-2000
percentage
% 80
70 60 50 40 30 20 10 0
76 77 78 79 80 81 982 983 984 985 986 987 988 989 990 991 992 993 994 995 996 997 998 999 000 1 1 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 19 19 19 19 19 19

M anuf ur notbas act es ed on nat alr our ur es ces

N at alr our and m anuf ur ur es ces act es bas on nat alr our ed ur es ces

Fuente: UNCTAD World Investment Report 2002

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Growth Rates of World Exports, by Technology Intensity of Product Groups, 1985-2000
% annual average

25 20 15 10 5 0

Developed countries Developing countries

ct s

.. .

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od u

fa c

Ma nu

pr

Ma nu

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Ba s

te c

Pr im

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f.

Ma nu

Me di

um

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Hi gh

Lo w

te

ch

h

Ma n

ed

h

uf a

on

.. .

IC T

International Market Shares of World Trade, 2000 and Increments during 1985 - 2000
(percent and percentage points)
15 countries with largest market shares, 2000 (percent) 15 counties with largest increments during 1985- 2000
(percentage points)
0.0
United States Germany Japan China France Canada United Kingdom Italy Holland Taiwan Mexico Rep. Korea Belg/Lux Spain Malaysia
China United States Rep. Korea Mexico Malaysia Ireland Thailand Taiwan Singapore Spain Philippines Hungary Viet Nam India Israel

2.0

4.0

6.0

8.0

10.0

12.0

14.0

0.0

1.0

2.0

3.0

4.0

5.0

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

“Winner”countries in world trade in goods, 1985-2000
Latin America & the Caribbean North America
0.31%

Chile

0.625% 1.25%

Notheast Asia

Argentina

Spain

Mexico 5% Korea USA... 1 China Taiwan Malaysia Singapur Thailand Philippines India

2.5%

A winner country is one that increased its market share between 1985 and 2000
Viet Nam

Finland Ireland Portugal

West Europe

Hungary Poland Czech Rep.

Israel Turkey

South and Southeast Asia

European rim
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

“Winner”countries in world trade in manufactures not based on natural resources, 1985-2000
Latin America & the Caribbean
Argentina

North America

0.31%

0.625% 1.25% Mexico 2.5% Korea USA. 5 Taiwan China % Malaysia Singapore

Notheast Asia

Spain

Viet Nam

West Europe

Portugal Finland

Thailand Indonesia Phlippines Ireland India Israel Turkey

Hungary Poland Czech Rep.

Bangladesh Pakistan

South and Southeast Asia

European rim
-

Morocco Slovenia Slovakia Tunisia

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

“Winner”countries in world trade in West European imports of manufactures not based on natural resources, 1985-2000
North America
Canada Mexico 0.31% 0.625% 1.25% Korea 2.5% USA. Spain Finland Portugal Ireland 5 UK.. % Taiwan China Malaysia Singapore Thailand Indonesia Hungary Turkey Poland Czech Rep. India Vietnam Philippines

Latin America & the Caribbean

Notheast Asia

Benelux

West Europe European rim

Israel Slovakia Rumania TunisiaMoroccos Slovenia

Bangladesh

South and Southeast Asia

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

“Winner”countries in world trade in North American imports of manufactures not based on natural resources, 1985-2000
Latin America & the Caribbean
Guatemala El Salvador Honduras 0.625% 1.25% Costa Rica Dominican Rep. 2.5% 5% Mexico China

North America

0.31%

Notheast Asia

UK.

Austria

Malaysia Singapore Indonesia Thailand Philippines India

West Europe

Finland

Ireland Israel Hungary

Sri Lanka Bangladesh Pakuistan

South and Southeast Asia

European rim
-

Turquía

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

“Winner”countries in world trade in Japanese imports of manufactures not based on natural resources, 1985-2000
Latin America & the Caribbean
Argentina 2.5% 5 China % Taiwan Malaysia 1 Singapore Thailand Indonesia Sweden Philippines Viet Nam

North America
Mexico

0.31%

0.625% 1.25%

Notheast Asia

Spain Benelux

Europa Occidental
Finland

Ireland

Hungary

Israel

South and Southeast Asia

European rim
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

The Big Opportunity in World Trade
# During 1985 – 2000 the world export market share of developed countries in "total exports: declined from 69% to 63 % "exports of non-resource-based manufactures dropped precipitously from 82% to 67% Some effects: # Mexico: gained in the North American market # Central and Eastern European countries: gained in the European market. # Asian “winner countries”: gaining in all markets
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Share of foreign affiliates in the total exports of China, 1986-2001
billions of dollars and percent
billions of dollars %

300 250 200 150 100 50 0
1986

Total Exports totales ($ billions of dollars. Exports of foreign affiliates ($ billions of dollars) % foreign affiliates

60 50 40 30 20 10 0

1988

1990

1992

1994

1996

1998

2000

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Foreign Affiliates’ Share of Exports
by country, manufacturing only, latest year

Econom y Ireland H ungary Philippines Poland C hina C Rica osta M exico M alaysia C Republic zech

Shareof foreignaffiliates 90% 86% 68% 52% 50% 50% 50% 49% 49%

•Foreign affiliates account for high and rising shares in many countries that have seen increased export market shares. •Especially in ISIPs in the electronics and automotive industries.

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Rep. K orea

15

The Role of TNCs in the Exports of Some Winner Countries
C ountry (Y ear) Total E xports 2000 (U billion) S$ ForeignA ffiliates’ Share(% ) ThreePrincipal TN C E xporters, 2000 E xports 2000 (U billions) S$

Sam E sung lectronics 279.6 50 IB M N okia C R osta ica Intel (2000) 6.7 50 D Food ole D M el onte H ungary V agen olksw (1999) 25.5 86 IB M Philips E lectronics Ireland Intel a (1998) 52.5 90 D C puter ell om M icrosoft M exico D lerC aim hrysler (2000) 180.4 50 G eneral M otors Fuente: UNCTAD World Investment Report 2002 agen Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & olksw t eem s i dad VTobago

C hina (2001)

1.5 1.5 1.1 1.7 0.2 0.1 3.2 2.2 2.0 4.8 4.3 2.4 6.9 6.7 5.2

What Efficiency-seeking TNCs look for when they extend their ISIPs to Developing Countries:

• Access to priority markets (i.e. European Union, NAFTA) • Skilled labor and technicians at competitive prices • Quality infrastructure and competitive logistics • Competitive local companies: cost, quality and timely delivery • The existence of industrial clusters and growth poles • Competent and efficient administrative, regulatory and supervisory institutions • A geographic location that fits in with their existing ISIP • Incentives
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

Emerging markets: comparison of FDI projects and FDI inflows
Region % of FDI inflows (2000) 6.8% 11.3% 2.2% % of world % of world GDP FDI projects (1998-99) (2000-2001) 6.9% 12.3% 2.5% 5.6% 18.0% 5.7% Ratio of projects / PIB 0.81 1.46 2.28

Latin America Developing Asia Central & East Europe
Source: Henry Loewendahl

Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad

TNCs and International Competitiveness
"TNCs have many effects (positive and negative) that in general are quite difficult to measure "One impact that can be measured with a degree of precision is that on international competitiveness and it can be a very strong impact "An “upside-down world” effect: due to ISIPs churning out non resource-based manufactures "Winner countries: small group; Asians in all markets vs. ECE only in Europe and LAC only in North America "This represents an important opportunity for developing countries
Tr ni Cour e on I er i ai ng s nt natonalI nves m entAgr ent ,Tr ni & Tobago t eem s i dad


								
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