Research on Internal Trade of Multinational Corporations

Author: Sun Guohui
Publisher:
Publish Date: 2002-01-01
Features: Internal trade has become a crucial tool for multinational corporations (MNCs) to achieve their globalization strategies. The substantial evolution of MNC internal trade in terms of trade methods and scale has gradually increased its impact on the entire international trade system and the direction of global economic development. This is of great significance for the development of China's national economy and the formulation of policies and regulations. This book covers topics such as the theory of internal trade, its forms, functions, pricing, constraints, and more.
After World War II, MNCs experienced unprecedented rapid growth. Currently, there are approximately 44,500 MNCs worldwide, with over 276,000 foreign branches. To maximize profits globally, MNCs implement integrated production and marketing management, incorporating a significant portion of international trade into their internal transaction systems. According to estimates from the United Nations, MNC internal trade now accounts for one-third of global trade, making it a notable phenomenon in the world economy.
MNC internal trade, also known as intracorporate trade, refers to cross-border transactions between a parent company and its overseas subsidiaries, as well as among subsidiaries themselves. Its fundamental purpose is to overcome the imperfections of external markets. To address the imperfections of the international market, MNCs conduct cross-border exchanges of goods and services between two relatively independent entities within the company. This remains fundamentally part of international trade in theory but is, in practice, merely one form of multinational operations, differing significantly from traditional international trade while exhibiting its own unique characteristics.
Through its internal circulation system, MNCs connect economies of many countries with different political and cultural backgrounds. Whether this is more beneficial or detrimental to these countries is still a subject of debate, but its profound impact on the global economy is an undeniable fact. This book introduces the current state of research on MNC internal trade domestically and internationally, as well as the research objectives, approaches, and methods. It covers topics such as the theory, forms, functions, pricing, constraints of internal trade, and its relationship with China.