TNCs (or Transnational Corporations) are large companies which which have offices or factories in several countries and are global because they operate across national boundaries. Examples of TNCs include Nike, Wal-mart, Microsoft, BP, McDonald's and many many more.
Why do they choose to locate in LEDCs?
Most TNCs have their headquarters in MEDCs such as Nike who ares based in Oregon in the USA. However, many TNCs are now choosing to locate branches in LEDCs - why is this? All we need to do is compare the average wages of people in different countries to see why this might be!
TNCs can be huge! Some make more money in a year than some countries do! They often find that by choosing the locate in LEDCs, they can;
(a) manufacture goods for sale more cheaply and,
(b) be near to large markets (places with large populations where goods can be sold).
Are TNCs good or bad?
There are a number of advantages and disadvantages to LEDCs of having a TNC locate in their country. You can download this list as a Word document by using the control below.
Homework question
To what extent can investment from TNCs help LEDCs to develop?
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