The role of TNCs in international development Japanese investment in EU and the Pacific Rim countries
<ul><li>Definition of a TNC </li></ul><ul><li>Reasons for Japanese investment in  </li></ul><ul><ul><ul><li>EU countries  ...
<ul><li>Results of such investment for Japan </li></ul><ul><ul><ul><li>Trade surplus </li></ul></ul></ul><ul><ul><ul><li>A...
Definition of a TNC <ul><li>Transnational corporations </li></ul><ul><li>Sometimes referred to as multi-national corporati...
Facts and figures 47,581 Sony 62,568 Nissan 111,052 Toyota 184,365 Mitsubishi 1994 revenue US $m Company 146,076 Denmark 6...
<ul><li>TNCs are believed to…..  </li></ul><ul><li>Directly employ some 40 million people around the world </li></ul><ul><...
Advantages to host country: <ul><li>Brings  work  to the country and uses  local labour </li></ul><ul><li>Local workforce ...
<ul><li>Companies provide expensive machinery and  modern technology </li></ul><ul><li>Increased GNP and personal income c...
Location of some Japanese companies in EU …. Where & Why ?
Adv / disadv of TNCs Refer to page 189 / 190 There is a  large market  for cars in EU Government earns  tax revenue  from ...
There is a  large market  for cars in EU Government earns  tax revenue  from company and from workers New working practice...
There is a  large market  for cars in EU Government earns  tax revenue  from company and from workers New working practice...
There is a  large market  for cars in EU Government earns  tax revenue  from company and from workers New working practice...
May 2000 P2
Japanese investment in the Pacific Rim <ul><li>Where  is the Pacific Rim? </li></ul><ul><li>The Pacific rim includes all t...
 
 
<ul><li>There are two types of investment in this region </li></ul><ul><li>In MEDCs (Canada and US where Japan  has invest...
<ul><li>Two types of investment have occurred…. </li></ul><ul><li>In the primary sector to obtain raw materials  – iron or...
Advantages and Disadvantages of Japanese investment Social gain: more taxes for the government which have been spent on he...
May 2002
Key terms Primary products Balance of trade Multiplier effect GNP Labour intensive Export Import Trade surplus TNC Definit...
(3 marks) May 2002
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Japan Foreign Investment V2

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  • Japan Foreign Investment V2

    1. 1. The role of TNCs in international development Japanese investment in EU and the Pacific Rim countries
    2. 2. <ul><li>Definition of a TNC </li></ul><ul><li>Reasons for Japanese investment in </li></ul><ul><ul><ul><li>EU countries M4 corridor market orientated </li></ul></ul></ul><ul><ul><ul><li>Pacific rim countries Malaysia lower cost location </li></ul></ul></ul><ul><li>Advantages to recipient country of Japanese investment </li></ul>SYLLABUS REQUIREMENTS….
    3. 3. <ul><li>Results of such investment for Japan </li></ul><ul><ul><ul><li>Trade surplus </li></ul></ul></ul><ul><ul><ul><li>Access to foreign markets </li></ul></ul></ul><ul><li>Results of such investment for EU and Pacific Rim </li></ul><ul><ul><ul><li>Market for raw materials </li></ul></ul></ul><ul><ul><ul><li>Access to high quality goods jobs </li></ul></ul></ul><ul><ul><ul><li>Training </li></ul></ul></ul><ul><ul><ul><li>Industrial investment </li></ul></ul></ul><ul><ul><ul><li>Increased taxation revenue </li></ul></ul></ul>
    4. 4. Definition of a TNC <ul><li>Transnational corporations </li></ul><ul><li>Sometimes referred to as multi-national corporations </li></ul><ul><li>A company which, by having factories and offices in several countries, is global. It operates across international boundaries </li></ul><ul><ul><li>Eg. Sony, Mitsubishi, Toyota, Nissan, Hitachi, Matsushita Electric Industrial </li></ul></ul><ul><li>HQ and main factory is usually in MEDC </li></ul>Refer to page 189
    5. 5. Facts and figures 47,581 Sony 62,568 Nissan 111,052 Toyota 184,365 Mitsubishi 1994 revenue US $m Company 146,076 Denmark 68,949 Singapore 70,626 Malaysia 1,017,306 UK 26,164 Bangladesh GNP US$m Selected countries
    6. 6. <ul><li>TNCs are believed to….. </li></ul><ul><li>Directly employ some 40 million people around the world </li></ul><ul><li>Indirectly influence a larger number </li></ul><ul><li>Control over 75% world trade </li></ul><ul><li>The largest TNCs have long been car manufacturers and oil corporations, but recently electronic and hi-tech firms have joined list </li></ul>
    7. 7. Advantages to host country: <ul><li>Brings work to the country and uses local labour </li></ul><ul><li>Local workforce receives a guaranteed income </li></ul><ul><li>Improve s the levels of education and the technical skills of the people </li></ul><ul><li>Brings welcome investment and foreign currency to the country </li></ul>
    8. 8. <ul><li>Companies provide expensive machinery and modern technology </li></ul><ul><li>Increased GNP and personal income can lead to an increased demand for consumer goods and the growth of new industries </li></ul><ul><li>Investment in infrastructure - roads, airports and services </li></ul><ul><li>Prestige value </li></ul><ul><li>Widens economic base of country </li></ul><ul><li>Improvements in standards of production </li></ul>
    9. 9. Location of some Japanese companies in EU …. Where & Why ?
    10. 10. Adv / disadv of TNCs Refer to page 189 / 190 There is a large market for cars in EU Government earns tax revenue from company and from workers New working practices have been introduced e.g. ‘just in time’ method. This enables UK workforce to operate more efficiently in increasingly competitive markets Regional aid is available from EU and / or UK to help with capital costs Governments have given financial incentives to locate in old industrial areas which experience high unemployment Disadvantages Advantage to UK and Region Advantage to TNC Labour costs are cheaper in UK than in Japan Reduce the cost of transporting cars from Japan to EU Bypass EU tariffs and escape paying import taxes on cars they manufacture and sell in Europe Possible closure threat: in a recession , the EU branch plants would be the first to be closed creating job losses Other companies attracted to set up component companies in the area Research and development: this sector with the most highly paid jobs tends to remain in Japan Greater consumer choice : greater variety of models from different manufacturers are available Competition : EU firms have had to compete with cheaper Japanese models Jobs are created not only in the assembly plant but also other component factories
    11. 11. There is a large market for cars in EU Government earns tax revenue from company and from workers New working practices have been introduced e.g. ‘just in time’ method. This enables UK workforce to operate more efficiently in increasingly competitive markets Regional aid is available from EU and / or UK to help with capital costs Governments have given financial incentives to locate in old industrial areas which experience high unemployment Disadvantages Advantage to UK and Region Advantage to TNC Labour costs are cheaper in UK than in Japan Reduce the cost of transporting cars from Japan to EU Bypass EU tariffs and escape paying import taxes on cars they manufacture and sell in Europe Possible closure threat: in a recession , the EU branch plants would be the first to be closed creating job losses Other companies attracted to set up component companies in the area Research and development: this sector with the most highly paid jobs tends to remain in Japan Greater consumer choice : greater variety of models from different manufacturers are available Competition : EU firms have had to compete with cheaper Japanese models Jobs are created not only in the assembly plant but also other component factories
    12. 12. There is a large market for cars in EU Government earns tax revenue from company and from workers New working practices have been introduced e.g. ‘just in time’ method. This enables UK workforce to operate more efficiently in increasingly competitive markets Regional aid is available from EU and / or UK to help with capital costs Governments have given financial incentives to locate in old industrial areas which experience high unemployment Disadvantages Advantage to UK and Region Advantage to TNC Labour costs are cheaper in UK than in Japan Reduce the cost of transporting cars from Japan to EU Bypass EU tariffs and escape paying import taxes on cars they manufacture and sell in Europe Possible closure threat: in a recession , the EU branch plants would be the first to be closed creating job losses Other companies attracted to set up component companies in the area Research and development: this sector with the most highly paid jobs tends to remain in Japan Greater consumer choice : greater variety of models from different manufacturers are available Competition : EU firms have had to compete with cheaper Japanese models Jobs are created not only in the assembly plant but also other component factories
    13. 13. There is a large market for cars in EU Government earns tax revenue from company and from workers New working practices have been introduced e.g. ‘just in time’ method. This enables UK workforce to operate more efficiently in increasingly competitive markets Regional aid is available from EU and / or UK to help with capital costs Governments have given financial incentives to locate in old industrial areas which experience high unemployment Disadvantages Advantage to UK and Region Advantage to TNC Labour costs are cheaper in UK than in Japan Reduce the cost of transporting cars from Japan to EU Bypass EU tariffs and escape paying import taxes on cars they manufacture and sell in Europe Possible closure threat: in a recession , the EU branch plants would be the first to be closed creating job losses Other companies attracted to set up component companies in the area Research and development: this sector with the most highly paid jobs tends to remain in Japan Greater consumer choice : greater variety of models from different manufacturers are available Competition : EU firms have had to compete with cheaper Japanese models Jobs are created not only in the assembly plant but also other component factories
    14. 14. May 2000 P2
    15. 15. Japanese investment in the Pacific Rim <ul><li>Where is the Pacific Rim? </li></ul><ul><li>The Pacific rim includes all those countries in Australasia, Asia, North America and Latin America that border the Pacific Ocean. </li></ul><ul><li>NB. </li></ul><ul><li>The shift in the location of the world’s manufacturing industry away from countries bordering the North Atlantic – N. America and W. Europe </li></ul><ul><li>The emergence of the NICs in S.E. Asia – Taiwan, Hong Kong, South Korea, Singapore </li></ul>Look at page 190
    16. 18. <ul><li>There are two types of investment in this region </li></ul><ul><li>In MEDCs (Canada and US where Japan has invested $72 million – similar to EU </li></ul><ul><li>In NICs where advantages include </li></ul><ul><li>Cheap adaptable workforce - LEDCs have lower wage rates than Japan </li></ul><ul><li>L ow tax zones – countries such as S.Korea have low tax zones for foreign firms allowing the TNCs to cut costs </li></ul><ul><li>Less strict environmental laws – labour & environmental laws are often less strict than Japan – lower costs to TNC </li></ul>page 191
    17. 19. <ul><li>Two types of investment have occurred…. </li></ul><ul><li>In the primary sector to obtain raw materials – iron ore from Australia </li></ul><ul><ul><li>tropical hardwoods from Indonesia </li></ul></ul><ul><li>In the opening of branch factories used to supply components for factories in Japan and to make goods which are labour intensive </li></ul><ul><ul><li>Sony have assembly plants in Taiwan & Philippines </li></ul></ul>
    18. 20. Advantages and Disadvantages of Japanese investment Social gain: more taxes for the government which have been spent on health care and education <ul><li>Environmental …… </li></ul><ul><li>Loss of areas of rainforest </li></ul><ul><li>Increase in soil erosion </li></ul><ul><li>Extinction of some species of plants and animals </li></ul><ul><li>Loss of land for farmers who were forced to move </li></ul>Economic gain – a large increase in GNP per capita which raises incomes and standards of living Disadvantages of Japanese investment in Thailand Advantages of Japanese investment in S. Korea
    19. 21. May 2002
    20. 22. Key terms Primary products Balance of trade Multiplier effect GNP Labour intensive Export Import Trade surplus TNC Definition Term
    21. 23. (3 marks) May 2002

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