chapter  14
39 Pages

Transnational corporations and economic development

Transnational corporations, which are companies operating in two or more nations, are far from being a new or recent element of the structure of economic relationships which define the less-developed world. In the early colonial period (Chapter 3), TNCs such as the Dutch East Indies Company and the British East India Company played a major role in the economic life of Java, India, Holland, and England. Even prior to the Industrial Revolution, these early trading corporations were determined to reap profits from their near monopolistic control of certain trade routes and commodities. However, most of these early TNCs were involved in trade, not in the direct production of goods. With the onset of the second industrial revolution (1870-1910), giant vertically integrated corporations emerged in many branches of primary production, such as mining, and

tropical commodities, such as bananas and rubber, and oil. Many of these vertically integrated companies established production and processing sites in the colonial areas, or in independent but poorer nations, such as in Latin America. These resource-specific transnationals often established a strong political presence, both within their nation of origin and within the host nation or territory.1