Examine the main determinants of Foreign Direct Investment location Essay

Examine the main determinants of Foreign Direct Investment location and strategies employed by Transnational Corporations to maximise the net advantages of the - Essay Example Globalisation is also considered as a primary contributor to the methods used to develop foreign direct investments. In addition, the continuous change in technology also pushed for firms penetrating other markets. For most trans-national corporations (TNCs), the schemes associated with maximising foreign direct investment (FDI) are intricate. These processes are developed through time considering the environmental changes and other circumstantial elements. Logically, the methods in which FDI is maximised by TNCs can be attributed to their nature and existence. Holistically, focusing on TNCs in discussing FDI requires the profound understanding of the two concepts. It is imperative to establish relationships and determine useful trends regarding the subjects. In this process, the extraction of empirical evidence is a necessity and has to be manifested with high level of credibility. Moreover, in-depth analysis will be provided to ensure that the desired outcomes will be realised. The most qualifying description of a firm to consider as a trans-national is its operations. Accordingly, corporations that function in two or more countries are defined as TNCs. Moreover, the general view of TNC is divided into three subgroups. First, horizontally integrated TNCs administer production in different locations to manufacture similar products. Second, vertically integrated TNCs use other countries as inputs for their production. Finally, diversified TNCs operate in different firms that manage production in a manner neither explained by the previous two sub-groups. McLean and McMillan (2003) stated that TNCs became popular in the 1890s. Usually, TNCs are based in highly industrialised countries and expand in different economies. It is being contended that TNCs are influential in the policy making of host countries. This is because TNCs have the capacity to boost an economy and move capital from locations to the other. In addition, some firms control