Concurrence of companies

1. FOREIGN DIRECT INVESTMENT AND MIGRATION FLOW

1.1 FDI, FII, multinational corporations and TNCs: 1.Foreign Direct Investment (FDI): refers to investment made outside the home country of the investing company in which control over the resources transferred remains with the investor. Eg. Renault buys shares of General Motors.2.Foreign Indirect (Portfolio) Investment: refers to specific assets and intermediate products (capital, debt, technology) which are separately transferred between two independent economic agents through the modality of the market. Only financial resources are transferred. Eg. UK buying bonds to finance US railways.

These investments are usually made by multinational / transnational corporations, whose definitions are not clear enough. For this reason, we would define: 1.Multinational: suggests a merger of capital from more than one-nation state. 2.Transnational: companies that are usually owned and controlled by the nationals of one country and enter into direct production activities abroad.3.Transnational corporations can be differentiated by their structure, that can respond to three types of integration:Vertical Integration: occurs when different stages of the production process are incorporated into one firm.Horizontal Integration: takes place when a company makes the same product in a number of different countries.4.Conglomerate Integration: occurs when a company produces a number of different product lines in a variety of countries.

1.2 The Globalization of Production: Globalization of production refers to the proliferation and stretching of corporate activity and business networks across the globe.Causes:- Technological change and changing organizational principles.- International finance expansion.- Reduction in international transport and communication costs.- Political decisions at national governments level.

1.3 Foreign Direct Investment (FDI): Positive direct effects: a) FDI provides additional resources and capabilities: capital technology, access to markets and management skills.b)FDI provides additional tax revenues through increase in economic activity.c) TNCs foster a more efficient division of labor.d) FDI improves the balance of payments through import substitution and export generation. Negative direct effects:a) TNCs transfer too few or the wrong kind of resources and assets.b) TNCs use transfer pricing to lower taxes paid.c) FDI promotes a division of labor likely to be detrimental to the country’s comparative advantage.d) TNCs worsen the balance of payments through limiting exports and promoting imports and outcompeting local companies that export more and import less.

1.4 The Global Division of Labor:The division of labor refers to the roles that people occupy in the production process.

The global division of labor captures a form of organization that reaches around the planet, but where work is not confined to particular states:-Intensive capital vs. labor intensive activities.-However, jobs thought to be the preserve of advanced industrialized countries exist alongside very labor-intensive jobs in developing states.-A major issue is the fate of the gendered division of labor.

The gendered division of labor refers to a situation in which men tend to be grouped in different jobs from women. It changes over time depending on social and economic circumstances.

There can also be a racial and ethnic division of labor.

Major developments-Changesin the production processa) Taylorism: practice of scientific management. The key to Taylorism was management control over worker time.Fordism: combination of the model of mass production with the mass consumption.Toyotism : flexible form of production which encouraged workers to work in teams and, by this, learn a variety of new skills.

From the new international to the global division of labor -New Industrialized Countries (NICs) - 1970    -Global division of labor: beginning of the 21 st century.   -International migration: 150 million people.

Key issue-The rise of China and India- The struggle for worker's rights:

• Freedom of association, right to collective bargaining, elimination of forced labor, abolition of child work, elimination of discrimination.
• US and EU workers, workers in NICs and peasant farmers.

2. THE UNITED NATIONS CONFERENCE ON TRADE AND DEVELOPMENT (UNCTAD)

The United Nations Conference on Trade and Development is the body responsible for dealing with development issues, particularly international trade. It was established in 1964 and counts with 194-member States.

It counts with a forum where representatives of all countries can engage in dialogue on different issues and discuss ways to establish a better balance in the global economy.

It offers technical assistance to developing countries and countries with economies in transition to build the capacities to become equitably integrated into the global economy.

Ministerial-level meeting every four years, World Investment Forum every two years and annual symposiums with the civil society. Every year the UNCTAD published the World Investment Reports.

2.1 The UNCTAD Functions:Trade and Commodities- Produces, analyses and collects data.- Supports participation of developing countries in trade negotiations.- Strengthens international trade in services.- Analyzes issue related to competition policy and consumer protection.- Advocates diversification and risk management.

Investment and Enterprise- Offer member States expertise on issues related.- Informs policymakers about the structure and evolution of FDI.- Provides technical assistance to attract investment.- Promotes entrepreneurship and enterprise creation and expansion.- Encourages responsible investment.

Technology and Logistics- Conducts research in science, technology (included TICs) and innovation for development.- Helps developing countries in designing and implementing technology and innovation policies for sustainable growth and development.- Carries out a program of work to establish efficient services in transport, trade facilitation and customs.