Negatives Of TNC

Today live in a heavily corporate world, every company is always competing for your dollar with trying to gain more and more market share. As profits grow so does the corporation, as it continues to expand to new markets by heading overseas and when it does that's when it becomes a Transnational Corporation. While corporations in the United States are rapidly growing into Transnational corporations its Ultimately lead to these TNC’s moving operations into developing countries in which therefore it has lead to these TNC’s providing poor working conditions, damage to the environment by ignoring local laws, provides little reinvestment in the local area, and natural resources being overexploited.

Transnational Corporations or Multinational

There are benefits to TNC’s and what they do in developing countries. According to (Zaharia, Transnational corporations, international law..) TNC’s have can create an economic impact and research shown between 1987 and 1997 American factories owned by transnational corporations are not only to less likely close down but last longer than local competition. Its because TNC’s are richer, larger size and have greater productions scale in which to assist them to achieve greater profits and efficiency at a greatly cheaper operation cost to the company. When companies are saving the amount of money on production and manufacturing, they have the ability to pour large sums of money into researching and developing new and better products. The TNC invests money by opening mines, factories, shops or offices in the host country leading to infrastructure growth, the development of mineral wealth and energy production, better roads and airports and improved services, the TNC can grow its market share by opening in other countries. The host benefits from all the investment and improvements that the TNC creates for the host country such as also creating jobs that TNC’s would employ the local people leading to higher more incomes and better skills and knowledge since The TNC cannot afford to bring in foreign workers so it relies on local employees which lead to local people’s incomes and skills improve and therefore they have more to reinvest. The government of the host country receives higher tax revenues from the TNC and through employees wages which can be spent on public services, such as health and education. The TNC often is given lower tax rates as an incentive to locate there; However as stated in (Rights & interests Trade & disputes, 2010) there is more tax being paid which can be used to benefit the country as a