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Transnational Companies and Globalization. Benefits and Costs

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  • Radulescu Magdalena

    () (University of Pitesti, Romania)

Abstract

TNCs have several advantages over local firms in using new technologies for export activity. They have large internal reserves of skill, technical support, experience and finance to design and implement the learning process. They have access to major export markets, established marketing channels and well-known brand names. They can transfer particular components or processes from a production chain to a developing country and integrate it into an international system. Such supply-side upgrading needs government support. Moreover, a policy to induce TNCs to enter more advanced activities by offering such incentives as specialized infrastructure and skills can accelerate the upgrading process. With a completely passive policy, TNC exports can remain at low, technologically too small, levels. Thus, a TNC dependent export strategy needs a proactive element for dynamic competitiveness. More important, an FDIdependent strategy is not a substitute for building domestic capabilities.

Suggested Citation

  • Radulescu Magdalena, 2012. "Transnational Companies and Globalization. Benefits and Costs," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 77-82, Decembre.
  • Handle: RePEc:ovi:oviste:v:xii:y:2012:i:2:p:77-82
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    More about this item

    Keywords

    TNCs; benefits; costs; Asian countries; FDIs.;

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development

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