ABSTRACT
The transnational corporations (TNC) are highly significant economic actors and their locational behaviour is necessarily of great importance to the developing world. Economies of scale have been one of the major factors underlying the growth and expansion of TNCs. This chapter considers important issues – the type of foreign direct investment involved, the declining dominance of United States TNCs and the changing significance of the internationalization of productive capital in the post war period. All of these help to set in context the interrelationship between TNCs, the industrial progress of developing countries (DC) and the international division of labour in manufacturing. In general upwards of 40 percent of DCs manufactured exports are in the traditional sectors of textiles, garments, shoes and leather products. As a whole DCs saw an increase not only in its share of global manufacturing value added, but even more so in its share of global manufacturing exports.
