1. TRANSNATIONALITY INDEX

2. Transnational Corporation
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
Any corporation that is registered and operates in more than one
country at a time; also called a multinational corporation.

A transnational or multinational corporation has its headquarters in
one country and operates wholly or partially owned subsidiaries in
one or more other countries.

The subsidiaries report to the central headquarters.

The motives for establishing a corporate presence in other countries
are

Desire for growth

Desire to escape the protectionist policies of an importing country

Preventing competition by acquiring competitive companies in
other countries

To reduce costs

3. United Nations Centre on Transnational
Corporations ( UNCTC )
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
In 1974, The United Nations established the Programme on Transnational
Corporations.

Between 1974 and 1992, it was carried out by the United Nations Centre on
Transnational Corporations (UNCTC).

The UNCTC was the focal point, within the United Nations system, for all
matters related to transnational corporations (TNCs) and foreign direct
investment (FDI).

The Centre's main office was located in New York.

In 1993, after a brief period in the United Nations Department of Economic
and Social Development (1992-1993), the Programme on Transnational
Corporations was transferred to the United Nations Conference on Trade and
Development (UNCTAD) in Geneva and is now being implemented by
UNCTAD's Division on Investment, Technology and Enterprise Development.

4. TRANSNATIONALITY INDEX (TNI)
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
The Transnationality Index (TNI) is a means of ranking multinational
corporations that has global presence

It is calculated as the arithmetic mean of the following three ratios

Ratio of foreign assets to total assets

Ratio of foreign sales to total sales

Ratio of foreign employment to total employment

The Transnationality Index was developed by the United Nations
Conference on Trade and Development

Multinational corporations are also ranked by the amount of foreign
assets that they own. However, the TNI ranking can differ markedly
from this.

The conceptual framework underlying this index helps to assess the
degree to which the activities and interests of companies are
embedded in their home country or host countries

5. Contd…
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
A high TNI value may raise questions about a home country’s
locational advantages (a small market, for example) or indicate strong
international competitiveness on the part of the home country firms.

A drawback of this index is that it does not take into account the size of
the home country, nor does it distinguish between companies whose
activities are concentrated in a few foreign countries and companies
whose activities are spread across numerous host countries.