Research On The Internal Trade Of Multinational Corporations

The internal trade of multinational corporations (MNCs) is the important part of international trade. The quick development of MNCs' internal trade leads to great changes on the content and form of international trade. So, studying and exploring MNCs' internal trade, not merely in theory, but in reality, are significant. This thesis is divided into three parts: The theoretical basis of MNCs' internal trade, the practical analysis on MNCs' internal trade, policy suggestions for China to tackle MNCs' internal trade. Through the analysis of three parts, comparatively systematic research on MNCs' internal trade has been carried on.The first part is the theoretical basis of MNCs' internal trade. In this part, at first, the classical MNCs theories have been reviewed. The classical MNCs theories mainly include Hymer's theory of monopolistic advantage, Vernon's theory of product cycle, Buckley and Casson's theory of internalization, Kiyoshi Kojima's theory of marginal industrial expansion and Dunning's eclectic theory of international production, etc. Secondly, the latest development of MNCs theories has been reviewed. The latest development of MNCs theories includes theory of direct investment development phases, theory of developing countries' foreign direct investment, theory of investment-induced factor combinations, theory of strategic management, etc. At last, the forward position of the theoretical research on MNCs ---- cluster and MNCs' position advantage ---- is reviewed.The second part is the practical analysis on MNCs' internal trade. This is the focal point of this thesis. In this part, at first, the current situation of MNCs' internal trade is analysed. It is pointed out that, with the development of global economic integration, the internalization rate of MNCs' trade will be higher and higher. At the same time, the sector structure, product structure and area structure of MNCs' internal trade are analysed. According to the development courses of the enterprises' transnational management, on the whole, the enterprises' internal trade will experience five phases: simple internal trade, vertical internal trade, horizontal internal trade, mixed internal trade and strategic allied internal trade. MNCs' internal trade is a special form of international trade, it has two key characteristics: First, implementing planned management; second, using transfer price. These two characteristics have determined that the core of MNCs' internal trade operation is investment decision and transfer price establishment. Through internal trade, subjectively, MNCs achieve their own intentions; objectively, MNCs are influencing the economic development of their mother countries, the host countries and even the globe. However, this doesn't mean internal trade can develop without bound and limitation, it will be restricted by MNCs themselves, international community as well as their mother countries and the host countries. In essence, there is certain limitation for internal trade to replace marketing, the extent of the limitation is determined by the internal trade cost. The internal trade cost includes cost of encouragement, cost of information, cost of restriction, cost of bargaining and cost of environment changes. Due to the existence of internal trade cost, there is certain limitation for internal trade to replace the external transaction. That is to say, within certain limitation, internal trade is comparatively effective; beyond this limitation, external trade will be more effective. The extreme value of the limitation is the border of internal trade. So, the border of MNCs' internal trade is the point at which the internal trade cost is equal to the external trade cost. The breaking down of MNCs' internal trade refers to the end of the vertical and horizontal internal trade among MNCs members which leads to the disintegration of MNCs' integrated management. The end of MNCs' internal trade will derive from the existence of specialization, poor efficiency and monopoly. Multilevel restrictions...