The criticism that TNCs 'drain surplus' from the Third World has not usually been adequately explained in terms of the nature of capital accumulation in these areas. Similarly the limited effects on local capital accumulation have either been denied or entirely attributed to the machinations of the TNCs. The balance of payments implications of foreign investment have tended to be exaggerated by both sides of the debate, while the real issue is the way in which the internationalization of production via the TNCs has transcended the limits of the nation state, limiting the significance of national economic categories. This has been brought out in the discussion of transfer pricing; however TNC critics have failed to locate the growing importance of intra-firm trade and transfer prices in relation to the process of capitalist development. As a result some of their proposals for controlling TNCs have been misconceived.
|Development Studies Discussion Papers - University of East Anglia
|Number of pages
|Published - 1984