Critically Evaluate the Role of Tnc's in the Changing Global Economy
Critically evaluate the role of TNC’s in the changing global economy? (40 marks) TNC’s are companies that operate across boundaries of countries, usually to maximise their profits and increase their selling market. How and whether they contribute to the changing global economy is a matter of debate. In order to evaluate their role the change, what TNC’s have done?, How have they shaped the economy? and who else is involved needs to be considered. Geographers feel differently about how TNC’s contribute to the global economy, some would say they stimulate it, whereas others would argue other factors such as the government, The World Bank and other organisations have a more important impact. Firstly, the change in the global economy needs to be considered. It is only recently, perhaps in the last 20 years that the world market has not been solely dominated by MEDC’s. This can be seen with the rapid development of NIC’s, arguably with the help of TNC’s. It was only in the 1990’s when China began to develop financially. The change in the global economy is a very recent occurrence. With TNC’s choosing to locate in NIC’s because of the cheap but skilled workforce, they are helping to economically develop areas. They do this by providing good infrastructure and providing jobs. They pay their workforce, who in turn can buy the product they are manufacturing. They arguably bring these developing countries into the global market. At present, more than 200 transnational corporations have come to invest in China and their projects are found across the country either in coastal areas or inland ones. It would appear that TNC’s do stimulate the economy, but other factors must also be considered. It is vital to look at what TNC’s actually do. Firstly, looking at a Hyundai’s role as an example, the positive actions of the TNC will be evaluated. Hyundai is located in 193 different countries around the world. Hyundai will be eager to locate in NIC’s as the labour costs are