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Business Ethics and Transnational Companies

  • Chapter
The Role of Business Ethics in Economic Performance

Abstract

Foreign direct investment (FDI) has been growing rapidly in the recent past. Indeed it has been growing faster than international trade, which has long been the principal mechanism linking national economies. In consequence the operations of transnational companies (TNCs) have a profound effect on most aspects of business life and on the prosperity of many nations. These investment flows are concentrated in a few countries, in that the ten largest host countries received two-thirds of the total inflows of $315 billion in 1995, while the smallest one hundred received only 1 per cent. Foreign direct investment is a major force shaping globalisation. The outward FDI stock which the 39 000 parent firms had invested in their 270 000 foreign affiliates reached $2.7 trillion in 1995. Moreover, FDI flows doubled between 1980 and 1994 relative to both global gross fixed capital formation and world gross national product. The value added of all foreign affiliates accounted for 6 per cent of world gross domestic product in 1991, compared to 2 per cent in 1982 (UNCTAD, World Investment Report, 1996).

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Authors
  1. Neil Hood
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Editor information

Editors and Affiliations

  1. University of Exeter, UK

    Ian Jones (Visiting Professor of International Management, Research Associate) (Visiting Professor of International Management, Research Associate)

  2. Centre for Business Research, University of Cambridge, UK

    Ian Jones (Visiting Professor of International Management, Research Associate) & Michael Pollitt (University Lecturer in Economics, Research Associate) (Visiting Professor of International Management, Research Associate) &  (University Lecturer in Economics, Research Associate)

  3. University of Cambridge, UK

    Michael Pollitt (University Lecturer in Economics, Research Associate) (University Lecturer in Economics, Research Associate)

Copyright information

© 1998 Neil Hood

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Hood, N. (1998). Business Ethics and Transnational Companies. In: Jones, I., Pollitt, M. (eds) The Role of Business Ethics in Economic Performance. Palgrave Macmillan, London. https://doi.org/10.1057/9780230379794_10

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