Discuss the Role of Transnational Companies in the Development of the Global World Economy. (10 Marks)

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An economy is the activities related to the production of goods and services within a specified geographic region. This can be on a national scale with the trade and services remaining within a country, but equally, if countries trade goods and services with each other, their economies interact on a global scale, fundamentally known as globalisation. This worldwide interaction of economies is else known as the global economy, with NICs and TNCs play a primary role in changing how it operates. An ‘NIC’ (newly industrialising country) are countries whose economies have not yet reached Developed Country status but have outpaced their developing counterparts in economic terms. The reason for the economic growth in NIC’s is mainly due to the undergoing of export-oriented trade or ongoing industrialization, seen in countries such as China, India, Mexico and Brazil with the experiencing of rapid industrialisation due to the export of goods. A ‘TNC’ is a company that operates in at least two countries. They often have management headquarters in their country of origin and operate in host countries alongside; examples would include Coca-Cola having over 139,600 associates around the world with 50% of them located outside of the U.S such as France; Guatemala, Mexico and Belgium. In the last century there has been a global shift in many aspects of the global economy, this has seen the emergence of transnational corporations such as Apple, Nike and Coca Cola and the rapid growth of newly industrialising countries such China, Brazil and Mexico. The reasons and factors regarding the creation of this shift in the global economy vary. An example is the advancement and development of transport along with the discovery of improved methods to reach the raw materials which drive industrialisation. NICs are having a major impact on sculpting the global economy. The
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