Economic Development (Nike)

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What is a Transnational Corporation (TNC)?

A TNC, like Nike, operates and sells products in multiple countries, moving production and markets across borders. They show the economic and social pros and cons for both the host country (where goods are made) and the home country (where the TNC is based).

What are the costs and benefits for a host country (e.g., Vietnam) from TNCs like Nike?

Costs for Host Country (e.g., Vietnam)

• Worker exploitation (low wages, long hours)

• Poor working conditions (unsafe factories)

• Child labor

Benefits for Host Country (e.g., Vietnam)

• Many jobs created

• Higher wages than local firms

• Attracts more foreign investment (FDI)

What are the costs and benefits for the TNC's home country (e.g., USA) from outsourcing?

Costs for Home Country (e.g., USA)

• Loss of domestic manufacturing jobs

• Consumer prices may not fully reflect cost savings

• Damage to company image due to labor controversies

Benefits for Home Country (e.g., USA)

• Increased corporate profits from lower manufacturing costs

• Creation of high-skill jobs (design, marketing, R&D)

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