Transnational corporations

Globalisation has resulted in many businesses setting up or buying operations in other countries. When a foreign company invests in a country, perhaps by building a factory or a shop, this is called inward investment. Companies that operate in several countries are called multinational corporations (MNCs) or transnational corporations (TNCs). The US fast-food chain McDonald's is a large MNC - it has over 34,000 restaurants in 119 countries.

Examples of multinational corporations

Shell petrol station in the UK

Shell

Shell petrol station in the UK

The majority of TNCs come from MEDCs such as the US and UK. Many multinational corporations invest in other MEDCs. However, TNCs also invest in LEDCs - for example, the British DIY store B&Q now has stores in China.

Factors attracting TNCs to a country may include:

  • cheap raw materials
  • cheap labour supply
  • good transport
  • access to markets where the goods are sold
  • friendly government policies