Exam 6: The Global Production Structure
Given the expanding importance of TNCs in global markets, the role of the state seems to
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As of early 2017, which four TNCs had the largest market capitalization, i.e., the highest total value of outstanding stock?
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How would an international agreement on governance of foreign direct investment benefit TNCs? How would such an agreement benefit states? What prevents such an agreement from being realized?
An international agreement on the governance of foreign direct investment (FDI) would benefit transnational corporations (TNCs) in several ways. Firstly, it would provide a more stable and predictable regulatory environment for their investments, reducing the risk of sudden policy changes or expropriation by host countries. This would in turn encourage TNCs to make larger and longer-term investments, leading to increased economic growth and development in host countries.
Additionally, an international agreement could help to standardize and streamline the regulatory process for FDI, reducing the administrative burden on TNCs and making it easier for them to navigate the complexities of investing in multiple countries. This would also benefit states by attracting more FDI, which can bring in new technologies, skills, and capital, and create jobs and stimulate economic growth.
For states, an international agreement on FDI governance would also provide a framework for cooperation and coordination on investment policies, helping to prevent a "race to the bottom" in which countries compete to attract investment by lowering regulatory standards. Instead, states could work together to establish common rules and standards that protect the interests of both investors and host countries.
However, there are several factors that prevent such an agreement from being realized. Firstly, there are significant differences in the interests and priorities of different countries when it comes to FDI governance. Developing countries, for example, may be more concerned with protecting their sovereignty and ensuring that FDI benefits their development goals, while developed countries may prioritize the protection of their investors' rights.
Additionally, the complexity of FDI governance and the diversity of national regulatory systems make it difficult to reach a consensus on common rules and standards. There are also concerns about the potential impact of an international agreement on national sovereignty and the ability of states to regulate FDI in the public interest.
Overall, while an international agreement on the governance of FDI could bring significant benefits to both TNCs and states, the challenges of reaching a consensus on such a complex and politically sensitive issue make it difficult to realize in practice.
Which of the following statements about sovereign wealth funds (SWFs) is correct?
The process in which a TNC contracts with other companies overseas to provide it goods and services is called
In developed countries, the globalization of production is connected with
Why do TNCs engage in foreign direct investment (FDI)? Assess several factors that contribute to the decision by TNCs to establish operations abroad.
Which of the following is not one of the fifteen largest nonfinancial TNCs (based on foreign assets owned?
What are mercantilists' main worries about the changing global production structure?
What benefits do economic liberals think result from the shift of a greater proportion of global manufacturing from developed to developing countries?
Explain the different perspectives of liberals, mercantilists and structuralists on TNCs.
Are TNCs held accountable enough for their misdeeds? Should they be subject to much more stringent regulations? If so, through what political, economic, or social institutions or mechanisms? Why might voluntary corporate social responsibility codes be insufficient instruments to attain important social goals?
Which statement accurately characterizes Global Value Chains?
Since 1990, which of the following countries or regions has usually had the highest annual net inflows of FDI?
Why haven't states done more to crack down on corporate tax avoidance? Why is it hard for governments to reduce tax avoidance and tax evasion by TNCs?
How are automation and the globalization of production affecting workers in developed and developing countries?
Which of the following is a likely reason why TNCs invest in production overseas?
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