TNCS Flashcards
what is a TNC
transnational corporation
companies that operate in at least 2 countries
where are headquarters usually
in a major cities with lots of high skilled worker and connections
why do TNCs operate globally
to escape tariffs
use lower production costs
reach foreign markets
exploit resources
where does research and development take place
usually in the country of origin
what are the main trading routes
usa
Japan
eu
how many tncs did usa have in 2014
564
where are factories often located for TNCs
in less developed countries where production costs are low.
production costs- labour, materials, land
what is a merger
2 countries agreeing to become one bigger company.
usually similar size.
positives of a merger
helps form links between where the companies operate
what are acquisitions
when one company buys another company, usually smaller
what is FDI
foreign direct investment
How can TNCs expand and gain more control
vertical integration - takes over part of the supply chain
horizontal integration- when a company mergers or takes over another company
