Transnational Corporations
What is the defining characteristic of a TNC?
A. It only exports goods to other countries
B. It operates in more than one country but is controlled from a central headquarters
C. It is fully owned by the host country government
D. It focuses only on agricultural exports
B. It operates in more than one country but is controlled from a central headquarters
What is the primary purpose of establishing Export Processing Zones (EPZs)?
A. To promote domestic agricultural production
B. To attract foreign investment and boost exports
C. To increase government control over trade unions
D. To reduce urban population growth
B. To attract foreign investment and boost exports
What are GVC's controlled by
Transnational Corporations
Which country had the highest GDP per capita on the graph?
USA
A potential benefit of hosting TNCs in developing countries is:
A. Greater access to global markets
B. Guaranteed elimination of income inequality
C. Permanent control over foreign-owned assets
D. Prevention of capital outflows
A. Greater access to global markets
Which of the following is a typical feature of EPZs?
A. Strict enforcement of labor laws
B. High corporate tax rates
C. Exemption from import and export duties
D. Ban on foreign ownership
C. Exemption from import and export duties
What was the example in the textbook given of a GVC
China's technology communications sector
Which country had the highest FDI on the graph?
Which of the following is not one of the four main types of TNCs?
A. Trading companies
B. Stand-alone branch manufacturing plants
C. Resource-intensive vertically integrated firms
D. State-owned development banks
D. State-owned development banks
How are Transnational Corporations (TNCs) commonly linked to EPZs?
A. TNCs use EPZs to avoid producing in their home countries.
B. EPZs are owned and operated entirely by TNCs.
C. TNCs use EPZs as low-cost sites for export-oriented manufacturing.
D. EPZs are created to regulate the activities of TNCs.
C. TNCs use EPZs as low-cost sites for export-oriented manufacturing.
What are 3 reasons a GVC might fail?
Less value can be added
(unskilled labor, dangerous conditions, results in large loans)
What is a basic benefit of inward FDI that governments attempt through policy & regulation?
Job creation
A common criticism of TNCs in less-developed nations is that they:
A. Always share their best technologies with local firms
B. Repatriate profits abroad, limiting local reinvestment
C. Focus exclusively on domestic markets in host countries
D. Create fully equitable income distribution
B. Repatriate profits abroad, limiting local reinvestment
What is one major criticism of EPZs in developing countries?
A. They lead to excessive government revenue.
B. They are fully integrated into local economies.
C. They often result in poor labor conditions and limited local benefits.
D. They discourage foreign investment.
C. They often result in poor labor conditions and limited local benefits.
Lack of _________ will lead to a GVC only producing low value goods
State-led development or industrial upgrading policy (possibly starting with Easy ISI etc)
Does FDI work for all countries why or why not? Give an example.
No, depending on a country's ability to invest domestically and develop its own infrastructure a different system works for each country to best industrialize.
Ex. Brazil vs. Korea