Transnational corporations and local economic growth in china - a comparative case study of Ningbo and Wenzhou

Abstract

This article uses a comparative case study to investigate the effects of Transnational Corporations on China’s local economy. It is found that different historical and geographical conditions, industrial structures and policy regimes have contributed to distinct patterns of economic growth and FDI location in Ningbo and Wenzhou. Concerning the economic effects of Transnational Corporations, the empirical evidences have shown that despite the positive relationship between Transnational Corporations and local GDP growth, Transnational Corporations do not possess substantial advantages for the increment of local government revenues and the incomes of local urban residents. Comparing with local private enterprises, Transnational Corporations might have limited contributions to the real economic benefits of localities and local residents.