1. World economic Geography
Topic: Transnational Corporation
Group:
Nguyen Vu Hong Minh BAIU08019
Tran Thi Lan Phuong BAIU08065

2. OUTLINES TNCs IN VIETNAM THE IMPACT OF TNCs ON WORLD ECONOMY
REVIEW
STATISTIC OF TNCs
THE IMPACT OF TNCs ON WORLD ECONOMY
TNCs IN VIETNAM

3. REVIEW
Principle of comparative advantage: “Two countries can both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods” ( David Ricardo)
Transnational corporation: “corporations which operate in more than one country or nation at a time and have become some of the most powerful economic and political entities in the world today.”

4. STATISTICS
In 1970, TNCs
In 2008:
TNCs, more than foreign affiliates( UNCTAD)
Total sales of TNCs ~ $ 31 trillions
The value added ( Gross product) of foreign affiliates worldwide ~ 11% of global GDP in 2007
The number of employees rose to some 82 million

5. (CONTINUED)
85 % TNCs in the Triad (European Union, Japan and the United States), only 5% in developing countries:
Six industries dominated: motor vehicles, pharmaceuticals, telecommunications, utilities, petroleum, electrical/electronic equipment
Top 100 TNCs account for 11 percent foreign assets, 16 percent of total sales, 12 percent of total employment.

6. SOME TNCS ARE BIGGER THAN SOME COUNTRIES MEASURED BY VALUE ADDED OR GDP, 2000, BILLIONS OF DOLLAR

7. “the productive core of the globalizing world economy.”
IMPACT OF TNCs
“the productive core of the globalizing world economy.”

8. Indicators of the Importance of Transnational Corporations in the Globalization Process
Foreign direct investment (FDI) : at least 75% of world flows come from TNCs
International trade: 67% of all exports are directly related to TNCs through intrafirm operations or trade with third parties

9. The Transnationality Index from 1993 to 2003
Evolution by region and country :
In 1993, EU=37, US=32, Japan=21, others = 10
In 2003: EU, more than 50% ; and the increase of some developing countries.
Shifts across sectors: from the primary sector and resource-based manufacturing to services and technology-intensive manufacturing
Note:
In 1993, three industries (electronics & computers, motor vehicles, and petroleum & mining) ~ 50 %
In 2003, they ~ 30%, all service ~ 25%

10. Positive Impact investment and increased export income
introduce unavailable goods and services that are essential for diversifying production
increase productivity of labor
stimulate local entrepreneurship
opportunity for technology transfer, leads to new domestic industries
tax revenue for host government
economies of scale, exports more profitable and competitive, increases national income

11. Negative Impact
introduce inappropriate products, technology, and consumption patterns
labor-saving technology increases unemployment
Increase gap between rich and poor population
require the subsidiary to purchase inputs from the parent company
hire the most talented entrepreneurs
limit the transfer of patents, industrial secrets, and other technical knowledge to local subsidiary
Investing in few industries.

13. TNCs and VIETNAM In 2010, FDI- 25% GDP
Key economic and provinces: in the South( Ho Chi Minh, Ba Ria- Vung Tau, Dong Nai, Binh Duong, in the North( Ha Noi, Hai Duong, Vinh Phuc, Hai Phong, Quang Ninh)

14. FOREIGN INVESTMENT MECHANISM IN VIETNAM 2010

16. SWOT ANALYSIS STRENGHS WEAKNEESES Relative economic growth
Increased investment and industry
Good social index
Stable political regime,
Cheap labor, natural resource
Strong domestic demand
Investment Law Disappointed result in FDI
Insufficient investment in industry, poor in infrastructure, transportation, education.
Economic Uncertainty
Attach special importance to oriented development
OPPORTUNITIES
THREATS
FDI is too much in the world
Global financial
WIPS Evaluation

17. References Foreign Investment agency http://fia.mpi.gov.vn/
International Monetary Fund
United Nations Conference on Trade and Development