7.4B Dominance of TNCS

• Most Transnational Corporations (TNCs) are publicly owned corporations owned by private shareholders

  • Nike, Shell, Nestle, Amazon are all examples of publicly owned TNCs
  • These are driven by profits and pay dividends to share holders
• Some TNCs are state owned, these are owned by the government and are often related to energy or communications

  • Gazprom (Russia), Aramco (Saudi Arabia) and EDF (France) is due to become state owned in 2023
  • Profits are reinvested into the TNCs
• • TNCs operate in foreign countries individually 
  • The 500 largest TNCs account for 70% of world trade
  • Many of the world's TNCs are based in the USA or in an emerging superpower
  • Governments and global institutions set the rules for the global economy but the main investment is through TNCs
  • TNCs involve themselves in all economic sectors and impact the global economy 

  
• TNCs influence the global economy through:

  • Patents
  • Trade patterns
  • IP
• Patents:

  • Patents are used by TNCs to protect their technology and innovations 
  • These are intellectual property systems which are used to prevent technologies and medicines being copied
  • They protect the wealth of the developed countries where the TNCs usually originate
  • They favour developed countries and mean that many new technologies and medicines are unavailable to developing nations
• Trade patterns:

  • Developed countries have greater participation in international trade than developing countries as a result of TNCs
  • Much global trade today is intra-company trade within the same company