The Research On Transnational Corporations' Foreign Direction Investment

With the development of world economy, the international foreign direction investment (FDI) flow vs. stock enlarged extremely, and become the main force to promote the world economy. Transnational corporations (TNC) as the subject of the FDI, through FDI , make capital technology, management flow in the scope of the whole world which arrange the resources reasonable and accelerate the development of world economy.The first chapter of the paper covered the origination, the standard and the feature of the TNC which originate from the middle of 18 century .After world war II, which scale continuously extend, and the number continuously increase, and have already become the main pillar of contemporary economy. The advantages that TNC have primarily include: resources dispose advantage, comparison cost advantage, strategy cooperate advantage, technique advantage. In order to keep those advantages especially technique advantage, TNC generally established many branches around the world and transfer its advantage internal, which create greater advantage.The second chapter analyzed the course of TNC'FDI and its trend. Before world war I ,the amount of FDI in the total internal investment is very small, the international investment regard indirect investment as principle. At that time ,TNC emphasized on domestic business. Between the time of two world war, the development of TNC'FDI is very slow. After world war II ,the United States replaced England to become biggest FDI mother country in the world.The third chapter summarize the relative theory .The fourth chapter analyzed The united states and Japan are. developed countries , and they are the earliest countries which invest to china. From the policy of open and reform practiced, china has attracted and utilized huge amount of foreign capital, the united states and Japan are important sources. The FDI from these two countries have their own characteristics: the American TNC regards china as important part of its global market, to occupy larger market in china, many American TNCs established research & develop institutes in china. The Japanese TNCs'FDI to china primarily make use of the cheap labor force and the land resources to transfer the marsinal industries.The last chapter point out Utilize TNC'FDI to china can accelerate the development our economy, but during the course of utilize foreign capital, there are many problem. How to solve the problem and create much better investment environment is the emphasis of our contemporary work.