A Transaction Cost Theory of the TNC
Business firms, along with nation states, are crucial agents in today's advanced economies. Transnational corporations (TNC) are business firms with activities in more than one nation state,1 and although they are but a small subset of all business firms, they play a dominant role in the world economy. According to UNCTAD (2009) there were some 82,000 TNCs in 2008 owning more than 800,000 foreign affiliates. Ten years earlier, their internal trade was estimated to already account for as much as three quarters of world exports (UNCTAD, 1999: 232)