[Mei Deping; Hu Yi] Huazhong Normal Univ, Sch Econ, Wuhan 430079, Peoples R China.
International Conference on Management of Technology
NOV 20-23, 2009
Taiyuan, PEOPLES R CHINA
[Hu Yi;Mei Deping] Huazhong Normal Univ, Sch Econ, Wuhan 430079, Peoples R China.
Transnational corporations(TNCs);Foreign direct investment(FDI);Economic globalization;Transaction cost
This paper makes use of the relevant theories of transnational corporations(TNCs) to have in-depth analysis on the layout and strategy of INCs global operating and global management, and further probe into the changes and trends in the organizational structure and business model of TNCs. The paper points out that: the imperfectness of international market brings about transaction costs, but also provides opportunities for earning profits. The enterprises bear the transaction costs in order to achieve the expansion of trade and profit. The organization will select the operating method with higher return and lower transaction costs. With the structural changes in international markets of commodity, interim productions and productive factor, the organizational structure of TNCs have been adjusted and optimized. After development in manufacture chain for many years, a few of advanced TNCs would focus on the chain of information and services, and fully utilize the international imperfect markets of senior human capital. In general, the organization of TNCs transform from the trade-oriented TNCs, then to the production-oriented TNCs and multifunctional TNCs, eventually to the knowledge-based INCs.
The globalization developed rapidly after the Cold War. The effect of economic relation on international peace becomes more and more significant. Especially, the effect of international trade and foreign direct investment (FDI) draws much attention. After the literature review, the paper uses the panel data of 29 countries in 1991-2000 periods to do empirical research. Through constituting VAR model to do variance decomposition, the paper explores that the trade and FDI has prominent effect in reducing international conflict, and trade and FDI can promote international peace complementarily. The cross-Strait political relation is analyzed as a case. The paper discovers that the development of trade and FDI between mainland and Taiwan is the Granger cause of their peace, so that it can promote the bilateral relation.