TRANSNATIONAL CORPORATION AND GLOBALIZATION MODELS-A COMPARATIVE ANALYSIS

摘要

Emerging markets are nations with social and or business activity in the process of rapid growth and industrialization. Based on data from 2012, there are around 28 emerging markets in the world, out of which the economies of China and India are said to be the largest. Emerging market hedge fund capital reached a record new level in the first quarter of 2011 of $121 billion. Due to the above reasons, as well as the U.S. economy stagnating, many US companies are looking to expand overseas. These companies are called Transnational Companies (TNCs) and are defined as companies that have their headquarters in one country and operate wholly or partially owned subsidiaries in one or more other countries. The subsidiaries report to the central headquarters. The growth in the number and size of transnational corporations since the 1980s has generated controversy because of their economic and political power and the mobility and complexity of their operations. In addition to the emerging markets serving as a huge opportunity of expansion for these TNCs, the stock markets in some of these emerging economies are also relatively stable as compared to the US. As a result of this more US companies are eyeing IPOs in foreign markets. When undertaking a foreign expansion, there are a number of globalization models that transnational companies can evaluate. In this paper, we will perform comparative analysis of the models, highlight the pros and cons, and recommend relevant application of the models by transnational corporations. The outcome of this paper will serve as a blueprint that TNCs could use to evaluate various globalization models to best serve their expansion needs.