Democratic thinking

Articles on democracy in the independent online media

November 20, 2005

Corporations and foreign investment

The link between production and the international economy, or the global production system, is a complex process with millions of workers, and workplaces integrated into diverse local, national, regional and global systems (O’Brien & Williams p.167).

In order to understand the structure of global production, focus must be drawn to the transnational corporation (TNC). TNC is defined as a firm that owns and controls production (value-added) facilities in two or more countries.

Increasing levels of foreign direct investment has brought about a transformation of the global production system and the growth of the TNC. TNCs account for the major part of the global production structure, and approximately 50 per cent of world trade.

Report by Aurgha Mahmud.


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