Bankarstvo (Jan 2015)
Transnational corporations and the effects of their operations on the economy of Serbia
Abstract
The processes of capital flows liberalization, opening of markets, and globalization in the second half of the 20th century led to a sudden increase of investments in the form of foreign direct investments (FDI), accompanied by a growing number of transnational corporations (TNCs) as the main vehicles of foreign investments. Their strength, size and power increased over time, resulting in over 100,000 transnational corporations with over 900,000 subsidiaries all over the world, which made TNCs the foundation of the global economy. Given that the inflow of foreign capital plays a significant role in the financing of the Serbian economy, this paper analyzes the inevitable consequences that the presence of TNC subsidiaries has on employment, export competitiveness and balance of payments of the host country. TNC operations have dynamized the trade through the supply chain concept, thereby generating the need to form new banking instruments for the purpose of financing international trade at a reduced risk. This is how bank payment obligation was formed, which will also be discussed in this paper.
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