Transnational businesses and globalisation | tutor2u Economics
Study notes

Transnational businesses and globalisation

  • Levels: AS, A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

Transnational businesses (TNCs) base their manufacturing, assembly, research and retail operations in a number of countries. 

The importance of transnational businesses

Many TNCs have become synonymous with globalisation such as Nike, Apple, Wal-Mart, Uber, Amazon, Google and Samsung. 

For example, Google has offices in more than 60 countries

The biggest 500 TNCs together account for nearly 70% of world trade.

TNCs are a key driver of globalisation because they have been re-locating manufacturing to countries with relatively lower unit labour costs in order to increase profits and returns for shareholders.

For example, Volkswagen, Toyota, Nissan and General Motors all have bases in Mexico which has helped this country to build a comparative advantage in manufacturing and then exporting vehicles within the NAFTA free trade area (Mexico, USA and Canada)

Transnational businesses from emerging countries

There are many TNCs from emerging/developing countries. 

  • China Mobile is in the top ten consumer brands in the world
  • Alibaba has expanded to be the biggest global online retailer. It is known as the Amazon of China!
  • The Tata Group conglomerate from India has made significant investments in Western economies e.g. Jaguar Land Rover
  • Infosys from India is one of the world’s biggest information system businesses employing over 160,000 people worldwide
  • Chinese car-maker Geely bought Swedish firm Volvo in 2010 for $1.8bn and took a 49.5% stake in Malaysian car-maker Proton (including the Lotus brand) in 2017
  • China’s Huawei Technologies is a competitor to Samsung & Apple

Subscribe to email updates from tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.


Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u

A New Home for tutor2u Resources

We've just flicked the switch on moving all our digital resources to instant digital download - via our new subject stores.

For every subject you can now access each digital resource as soon as it is ordered. This will always be the latest edition of each resource too (and we'll update you automatically if there is an upgraded version to use).

Simply add the required resources to your cart, checkout using the usual options and your resources will be available to access immediately via your mytutor2u account.