The Rise of Transnational Corporations from Emerging Markets
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The Rise of Transnational Corporations from Emerging Markets

Threat or Opportunity?

Edited by Karl P. Sauvant

This insightful book shows that foreign direct investment (FDI) from emerging markets has grown from negligible amounts in the early 1980s to $210 billion in 2007, with the stock of investment now being well over $1 trillion. This reflects the rise of firms from these economies to become important players in the world FDI market. The contributors to this book comprehensively analyze the rise of emerging market TNCs, the salient features of the transnational activities of these firms, the relationship of outward FDI and the competitiveness of the firms involved, their impact on host and home countries and implications for the international law and policy system.
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Chapter 15: The Need for an Adequate International Framework for FDI

Joseph E. Stiglitz


Joseph E. Stiglitz INTRODUCTION The thesis of my book Making Globalization Work (Stiglitz 2006) is that, in many ways, globalization has not lived up to its potential. I explain, for instance, the ways in which globalization has not benefited everybody. It has not been the case that a rising tide lifts all boats: there are some people and countries who are actually worse off. But the problems are not inherent in globalization; it is the way in which globalization has been managed. In the book I try to describe a number of reforms that would help make globalization work, or at least work much better than it has so far for a lot of people. 15.1 A PERSPECTIVE ON TNCS In one chapter of my book I talk about transnational corporations (TNCs). This is very natural, because TNCs are the principal mechanism through which many of the benefits of globalization are achieved, but also through which many of its problems are realized. This is why you hear different views about these corporations. They are the vehicle through which knowledge is transferred. A large part of the knowledge is produced in the advanced industrial countries, and then gets transferred through TNCs to emerging markets. Training that occurs in many developing countries by TNCs helps close the knowledge gap between the developed and developing countries, and increasingly development economists see this knowledge gap as the central problem facing developing countries. To some extent, TNCs also play a role in...

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