Comment on the view that TNC (transnational companies) are footloose within the global economy?do you agree with it? what theory should apply by answering this question?

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pohnpei397 eNotes educator| Certified Educator

I would tend to agree with the idea that TNCs are "footloose" but I would argue that they are not as free to move as some people might think.  To show what I mean, I will talk about a couple of trends I have been reading about lately.

First, I have read that many companies are starting to move some of their manufacturing from China to countries like Bangladesh.  They are doing so because China's labor costs are rising.  This supports the idea of footloose companies.

On the other hand, I have also read about the Japanese-owned companies that have been facing strikes at their factories in China.  These companies are not able to just get up and leave.  They require relatively skilled workers and relatively stable conditions.  Neither of these is available in many countries that would have workers who would work for less money.  For example, the electric supply in Bangladesh is not consistent enough for these companies.

So some companies, ones that need only unskilled labor and can bear unstable conditions, are really footloose.  Others are less so and can only move in certain conditions and with a fair amount of lead time.