Economic science/ 2. International economic activity

Dmytrenko O. S.

National University of Food Technologies

Transnationalization in the International Financial Relations

According to the J. Menwill Harris, international finances are economic aggregate of time and indeterminacy of decisions, which are related to several different countries, taking into consideration that each independent state has its own currency, business rules and political systems. In international financial sphere, except for national economic agents – state, enterprises, citizens, – transnational entities are distinguished – international organizations and international financial institutes. Flow of international finances is made in such main ways: foreign exchange operations; monetary and credit and settlement services of commodity buy-sell; securities operations and with different financial instruments; foreign investments in fixed and current capital and others.

Transnationalization is a part of international finance. It is an integral feature of the modern world economic development. The relationship between economic developments of countries and transnationalization, that as the process of economic globalization became very active exactly in 90-ties of ХХ century, manifests with considerable specificity. Significant contribution to the theoretical comprehension of the transnationalization problems, development of transnational corporate systems, global and international strategies of TNC have made such foreign scientists as D. Berch, А. de Gius, J. Dunning, R. Kaplinski, R. Coase, R. Оllіо, P. Peckar, S. Hymer, Е. Helpman and others. Significant contribution in the study of theoretical problems associated with the activities of TNCs.

The phenomenon of transnationalization can be characterized by four interrelated transnational shifts that have intensified in the last two decades:

First, transnationalization refers to the globalization and Europeanization of markets and domestic structures and subsequent decline in the meaning and efficacy at national borders.

Second, transnational shifts relate to the intensification of competition, i.e., the notion that capital and labor are increasingly mobile.

The third feature is the spread of transnational networks of people and firms linked by Information and Communication Technologies (ICTs) such as microcomputers and the Internet.

Fourth, transnationalization is inherently related to the rise in the importance of markets and their dependence on random shocks.

Today among 100 largest economies in the world, 52 are TNC, and the rest are the states. From this point of view, the interaction between post-transformational countries and TNCs so to say “at the intersection” of the national economies and spheres of economic activities can not take place. At the same time it is necessary to keep in mind that the nature of TNCs is dual and contradictory (meanwhile such duality is inherent in TNC of both foreign and national origin). Transnationalization processes, occurring in our time in the field of cross-border information exchange, as a result of growing magnitude and influence of corporate structures in this sector have become essentially determinative in political, economical and security spheres in different countries.

Considering the global economic processes and the need to adapt to them in the interests of macroeconomic development, the need in determination of Ukraine’s place in the processes of transnationalization is arisen. The main prerequisite for this is the presence of large domestic companies, which tend to the status of TNCs. According to the business-rating “TOP-100” the largest companies in Ukraine are NAK Naftogaz Ukrainy, Metinvest, Energorynok, Azovstal, TNK-BP Commerce (companies that had the largest net income); Kyivstar, Metinvest, NAK NaftogazUkrainy, Northern GOK and Privatbank (the most profitable companies). Two largest automobile corporations in the world are General Motors and Ford. The combined sales of Mitsubishi, Mitsui, ITOCHU, Sumitomo, Japan’s top six Sogo Sosha or trading companies, are nearly equivalent to the combined GDP of all of South America.

Transnationalization provides industrial cooperation and scientific and technical cooperation with major domestic enterprises with foreign companies. As for the entry of domestic entities to the structure of foreign TNCs it is necessary to state that in modern terms TNCs are increasingly moving to the complex integration of the units into the parent company, refusing to delegate the affiliates, situated in receiving countries, certain limited (thus discriminating against such units) functions.

Thus, transnationalization is condition of perspective development countries. It influences in the economic development countries and intensifies their position in the international market.

Literature:

1. Eun Ch. S. International Financial Management, Boston: McGraw-Hill, 2010. – 551 p.

2. Germanian, R. The international organization of credit, Cambridge: Cambridge University Press, 2009. – 300 p.

3. OECD Handbook on Economic Globalization Indicators. – OECD, 2011. // [Electronic recourse] Access mode: www.oecd.org

4. Rearney A. T. Measuring Globalization: Economic Reversals, Forward momentum by Foreign Policy, March 2010. // [Electronic recourse] Access mode: www.foreignpolicy.com

5. Shkurupiy О. V., Bilobrova Т. О., Deineka Т. А. Ukraine in the Processes of Economic Conditions Development Transnationalization: Possibilities of TNC’S Innovation Potential Attraction, 2012. – 25 p.

6. The World Economic Order. Past and Prospects. – L., 2008. – 209 p.