Transnational Service Corporations in the Process of Globalization

Abstract

Transnational corporations (TNCs) are playing a key role in the ongoing globalization process. Their strategies largely determine volume and nature of trade flows, foreign direct investments and financial flows. The determinants of these strategies are themselves rather complex. They take into account not only costs factors and specific assets of countries but also a complex nexus of network externalities and national routines as well as their own know-hows which, contrary to some beliefs, are still largely influenced by their country and trade of origin. This last feature appears in the composition of their board, in the form of their internal organization as well as in the nature and geography of the transactions in which they are the more competitive.2 The diversity of these determinants suggests an eclectic approach to the organizational issue that TNCs represent, as Dunning (1988) advocates. The study of TNCs as organizations has developed steadily since the 1960s, when their role and ‘eclectism’ became firmly documented (see Hymer, 1960; Penrose, 1959). Their evolution in the past two decades towards more decentralized, networklike structures is also a widely admitted stylized fact (Dunning, 1988, 1993; Delapierre and Michalet, 1989) which constitutes a major feature of the present globalization process. In this perspective the specific role of TNCs in services is less ascertained.KeywordsForeign Direct InvestmentService ActivityTrade FlowBusiness ServiceGlobalization ProcessThese keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.