ABSTRACT
Differences between the overseas behaviour of TNCs can be partly explained by the cultural, economic, and political environment of their home country: how, when, and why the firm looks abroad for business opportunities (Goodman 1976:83), and the timing, location, and sectors chosen by TNCs. For example, United States TNC activity generally has been in technology-intensive industries at the top end of the product cycle, 1 shaped to a large degree by the particular characteristics of the USA economy, e.g. high average incomes and a large sophisticated market (Vernon 1971:13). The comparative advantages of USA-based corporations lie in research and development, capital, and skilled manpower, and so it is not surprising that their overseas investments have been concentrated in areas such as pharmaceuticals and oil refining. Similarly, continental European firms began to manufacture overseas due to oligopolistic advantages in technological innovation. However, their type of product and process innovations were quite different, and biased towards their domestic concern over material-saving processes, new material substitutes and goods orientated towards low-income earners (Franko 1974:289).
