Importance of transnational corporations in the world economy and their regulation

The role of transnational corporations in the current global economy is of ever-increasing importance. The dynamics of the segment of transnational corporations together with the increasing indicators confirm the current trend. And one can expect that these economic actors will increasingly affect the world economy. Transnational corporations have the ability to coordinate and control various processes and transactions through transnational production networks, both within the economy and among the countries themselves. Their ability to take use of geographic differences in the distribution of factors of production among countries as well as the differences between national policies of each count, clearly illustrates their role in terms of their importance in the world economy. Activities of the TNCs are associated with major political, cultural and social impacts. Currently, it is argued that the on-going global economic integration points in the first phase to limit the scope of national economies and, according to these scenarios, the world should be ruled by large multinational corporations. Their economic power in many cases exceeds the economies of individual states. This process results in new geopolitical paradigm and new world economic order. The issue of multinational corporations but also corporate social responsibility is currently a widely discussed topic. Actually it is a very controversial topic and in this respect there is no general consensus.