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A TNC is a firm that owns and controls production facilities in two or more countries. They’ve become an important part of the economy nowadays and they expand more and more. We could think that they are an engine of the development but they also may encourage inequalities. We will talk about their role in the world : are they a factor on development or a tool to dig the inequalities ? Firstly, we will explain it from a political standpoint. Then, we will explain their impact on an economic standpoint. Finally, we will talk about their role on a cultural and social standpoint.

We have two documents to help us: the first is a map which represents the most attractive regions for Foreign Direct Investments in percent. The second one is a cartoon made by Seppo Leinonen which represents workers of the firm Nike.

From a political standpoint, TNCs help for the development, especially thanks to their FDI. This process consists in create a subsidiary in another country or buying a foreign firm. With the first document, we can see that for 814 respondents, Central & Eastern Europe is the most attractive in 2010 for 52% of them. There are 3 poles where the FDI goes : USA, Europe and China/East Asia. But the FDI seems to go more and more on emerging countries such as Brazil or India. In Brazil, 2006 it represents 5% of the votes and in 4 years it increases in 12%. China keeps a well-ranked place with 39%. It could be explained with the relocation of big firms. They keep their research and development on the original countries and the production is done in China or in countries with a cheap labour force. Inequalities are huge between workers and directors. Plus, some firms get a lot of power. Some of them such as Apple has a turnover at least equal to some GDP like New Zealand. They get a lot of power also in countries where they create a subsidiary. There are a lot of negotiations made with the government and politics help a lot the companies to be the most attractive. Governments make offers to TNC to attract them by reducing taxes or they give permissions or laws to the TNC. It’s a big paradox because the TNC gets more and more power and they tend to control the politics.

From an economic viewpoint, TNCs are quite important. They enable to create a lot of jobs around the world, they produce a lot. They produce a lot to satisfy all the countries so they must export. The market is in interdependence because there are a lot of money, goods, services or capital flaws between the countries. Thanks to the free trade, there are no more taxes so the company can make some profits. Plus, TNC invests also in countries if they see a profitable solution. But TNCs aren’t perceived as good for the economy. Some people say that they exploit the labour force and cause natural damages. But the TNCs are now more seen as the key to economic growth because they give a large aspect of products and they tend to lower prices. They encourage to invest and the market is now more inter-dependent and inter-connected. The TNC are more and more efficient beacause they tend to maintain low prices of their products. This process may keep a lot of consumers and can attract others. Even if they are a good part in the economy growth with the creation of jobs all around the world, they want to be bigger by controlling resources and even smaller companies.

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