Transnational Corporation Case Study

Transnational Corporation is a large corporation which produces or sells goods or services in various countries (Christopher). The issue of whether the transnational corporations can promote the economic development in underdeveloped countries has been discussed a lot. It’s an important issue because transnational corporations have been one of the most active and most remarkable points of economic growth. According to Top 200: The Rise of Corporate Global Power, “of the 100 largest economies in the world, 51 are corporations, [such as Wal-Mart Stores, Exxon Mobil, Chevron, General Electric, Ford and so on]; only 49 are countries (based on a comparison of corporate sales and country GDPs). And the top 200 corporations’ sales are growing at a

What the underdeveloped counties get is the destroyed environment while developed countries get most of the capital and cheap labor. For example, there are many Nike factories in Indonesia and Vietnam using the cheap labor and low price ingredient, but the local countries and workers only get little profits. So the factories have to extend working hours and even employ child laborers working in dangerous places for higher profits. In China, the 18 attempted suicides by Foxconn employees resulted in 14 deaths. In excess of the 36 hours a month allowed by Chinese law was routinely demanded from Foxconn employees (Fiona, James and Mimi). Of the 100 largest economies in the world, corporations are more than countries (based on a comparison of corporate sales and country GDPs) (Anderson and Cavanagh 3). When the national corporations in underdeveloped countries compete with transnational corporations, they are in the disadvantage position, which makes the economy rely heavily on transnational corporations. What’s more, underdeveloped countries take the risk of cultural invasion which makes them lose the control of cultural and social

On the one hand, the government should provide a favorable environment for local corporations. On the other hand, transnational corporations should be both encouraged and limited. The policies can reduce the tax rate to attract more investment and set up special departments to manage and supervise transnational corporations. To protect some industries that can be monopolized easily, such as the financial industry, defense industry and telecommunication industry, transnational corporations’ investment should be