capitalism

Question 1

what are transnational corporations?

Answer 1

any corporation that’s registered and operates in more than one country. has its headquarters in one and operates or partially owns subsidiaries in 1+ countries

Question 2

not all corporations are transnational- although they operate in multiple countries…

Answer 2

they don’t have much FDI

Question 3

foreign direct investement

Answer 3

an investment in a business by an investor in another country for which the foreign investor has complete control over the company purchased.

Question 4

what was the historical trend for FDIs?

Answer 4

in the 90s, FDI’s went to other rich countries but now its to developing countries

Question 5

which developments allowed the rise of corporations?

Answer 5

1. technological change
2. policy liberalization
3. increasing competition

Question 6

product life cycle theory by vernon

Answer 6

1. innovative product becomes produced in a developed country because it requires capital
2. a cheaper version is created in a developing country (mature product)
3. mass production- as technology gets easier to produce, its no longer innovative (standardized)

Question 7

appropriability theory by caves

Answer 7

you want to sell your product to the chinese market but you can’t give it to a Chinese company because they may steal it. so you open a branch in China and invest money there.

the theory explains why corporations open branches– because they’re afraid that theft will lead to competition in the market.

Question 8

branch factory syndrome by hymer

Answer 8

because TNC’s aren’t transferring intellectual property abroad- they’re preventing their economies from developing. there’s no beneficial effect of having a TNC in your country- you’re just a cheap source of labor for them

Question 9

TNC strategies

Answer 9

1/ branch factory syndrome
2/ politics and protectionist barriers
3/ currency instability
4/ global competition

Question 10

politics and protectionist barriers

Answer 10

if eu has high tariffs for japanese cars, the manufacturer can do everything in japan but assemble the car in germany to sell its product more and pay less taxes

Question 11

currency instability

Answer 11

delocalizing some parts of your products into the country where you want to sell it allows you to not get affected from currency differences

Question 12

global competition x tnc strategies

Answer 12

some countries cut taxes to attract companies like cayman islands

Question 13

agents of capitalism - lenin

Answer 13

capitalism needs imperialism to survive, even if it doesn’t invade countries, they should extract resources

Question 14

agents of western hegemony - gilpin

Answer 14

US corporations have participated to the global hegemony of the US - underpinning idea: TNC’s aren’t just businesses

Question 15

stopford and strange - triangular diplomacy

Answer 15

1. state-state
2. firm-state
3. firm- firm

Question 16

footloose corporations

Answer 16

corporations move territory- where the taxes are better

Question 17

what is dependency? - evans

Answer 17

a situation in which the rate of accumulation are externally conditioned

Question 18

what is dependent country? - evans

Answer 18

one whose development is conditioned by the development of another economy.

Question 19

core-periphery-semiperiphery by evans

Answer 19

relation isn’t from nation to nation but from center elite to dependent elite - also inside a country too

Question 20

disarticulation and exclusion- evans

Answer 20

center extracts primary resources or exports technology that doesn’t benefit the dependent country

products imported from the center are the rich elites

capital intensive technologies in modern sector marginalize masses of producers.

a company will only build a road leading to the resources, not anywhere else

exclusion from the economy for the masses- they are paid so less that they can’t benefit from the development or buy the products they produce

Question 21

“transnational corporations aren’t just profit making firms” - evans

Answer 21

1. they remove control over production

2. they extend alienation across boundaries

Question 22

“transnational corporations reinforce disarticulation” - evans

Answer 22

1. they develop infrastructure that benefits them
2. they keep knowledge and tech to the center
3. products are aimed at dependent elites

Question 23

the state in dependent development - evans

Answer 23

the state plays a key role in dependent countries. unless the state intervenes, there’s no effective sponsor for peripheral development
they must deal with tnc’s as “Internal foreign policy”