Economic Earth

Investment is not an apolitical process where the money is grown mysteriously. When companies and government from different country define and distribute access to assets, there will be an international investment ends as transnational corporations.

Transnational corporations will cause the international capital flows. International capital flows divided into three main types. The private capital flow come from the private sector, including foreign direct investments and bank lending by private bank. Private grants from non government organizations also considered as part of the private capital flow. Official capital flow come from state organization and local authorities. The remittance flows or the sum of worker’s remittances, compensation of employees and migrant transfer have become another source of capital flow for developing countries.

Transnational corporations are owned in their home country and invest in the host country. They may acquire a corporation by merger or acquisition. If a business organization shares ownership with local investors in the host country, it is called as joint venture. A transnational corporation can be a public corporation that trades its shares on stock exchange. The buyers of the shares are shareholders. The shareholders can be an individual or an institution. A transnational corporation can be a private corporation too, which means it doesn’t have shares that are traded publicly. Even the transnational corporation can be a state corporation, which the majority of its shares owned by government or local authorities.