ABSTRACT
An international firm which produces in several different countries; also known as a transnational.
Firms of this character have evolved from companies which exported much of their output. The time came when it became sensible to produce abroad rather than incur transport and related costs. Distant locations can have the attractions of lower labour costs, easier taxes and fewer regulations inhibiting the right to manage. Also there can be a profitable transfer of technology from an advanced economy. Corporations which have sprung from the USA, UK, Switzerland, France, Sweden and Japan principally, have reached an individual size in terms of total income larger than that of some national economies. The different subsidiaries spread across the world are linked by the internal market within the corporation, with exchanges of components and services taking place at ‘transfer prices’ which do not always reflect full costs.
