The Rise of TNCs from the South

Abstract

Transnational corporations (TNCs) from developing and transition economies (‘Emerging TNCs’) are rapidly strengthening their business links worldwide and contributing to the evolving global economic landscape. The core concepts and issues related to their emergence will be covered in this chapter. First, a large share of foreign direct investment (FDI) by developing country TNCs is directed to neighbouring and developing economies. Second, these companies have recently embarked on their internationalization paths, and the motivations, strategies, and characteristics are yet to be clearly identified. In particular, emerging TNCs have implications in terms of the competitive landscapes in developed and developing host economies. In the context of other developing host economies, some questions arise as to whether such competition will be beneficial. Third, in a regional context, as much FDI from Emerging TNCs is directed towards nearby countries, both national and regional institutional frameworks must be analysed to understand whether these TNCs’ internationalization should be encouraged, how regional economies benefit, and the extent to which regional policies can be designed to support such regional cross-investments in view of enhancing the mutual beneficial impact on countries’ development.