AQA AS Geography Health: Transnational Corporations

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Transnational Corporations
A transnational corporation is a company that operates in at least two different countries.
TNCs are the driving force behind economic globalisation and tend to be involved in a web
of collaborative relationships with other companies across the globe.
The significance of TNCs:
They control and coordinate economic activities in different countries and develop
trade within and between units of the same corporation in different countries
They can exploit differences in the availability of capital, and costs of labour, land
and building
They can locate to take advantages of government policies in other countries such as
reduced tax levels or less strict environmental controls. They can get around trade
barriers by locating production within the markets where they want to sell
The large size and scale of operations of TNCs means they can achieve economies of
scale, allowing them to reduce costs, finance new investment and compete in world
Large companies have a wider choice when locating a new plant, although
governments may try to influence decisions as part of regional policy or a desire to
protect the home markets
Governments are often keen to attract TNCs because inward investment creates jobs
and boosts exports which assist the trade balance. TNCs have the power to trade off
one country against another in order to achieve the best deal
Within a country, TNCs have the financial resources to research several potential
sites and take advantage of the best communications, access to labour, cost of land
and building and government subsidies

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Pharmaceutical Transnational's
Pharmaceutical company's research, develop, produce and distribute drugs to treat disease.
They affect world health because they choose which drugs to develop and what prices to
Research and production
There's more money in wealthier countries so pharmaceutical companies often choose to
research and produce drugs for diseases that mainly affect wealthier countries. This leads to
improved health in wealthier countries.
Some pharmaceutical companies use the profits they make in wealthier countries to
subsidise research into diseases that affect poorer countries.…read more

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Branded Pharmaceuticals
Pharmaceuticals can be sold under two broad categories: generic or branded.
Branded medicines are more expensive than generic counterparts. However, the generic
name of the drug is its chemical description. This means that the generic drugs are
chemically identical to their brand-named equivalents.
The generic name for a drug tends to be long and hard to remember whereas the brand
name is often catchy.…read more

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Tobacco Transnational's
About a third of the world's population over the age of 15 smokes.
Although wealthier countries are starting to smoke less, it's becoming a huge problem
elsewhere ­ 80% of smokers live in poorer countries.
Almost four million people die each year from tobacco related illnesses, such as lung cancer
and heart disease.
Death rates are rising because most tobacco related illnesses take years or decades to
develop.…read more

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The Global Clamp Down on Smoking
Smoking bans in the USA are being adopted by individual city and state authorities
- California introduced a ban on smoking in public buildings in 1993.
Smoking is also banned in bars, restaurants, beaches and enclosed workplaces
- New York banned smoking in bars, clubs and restaurants in 2003
A ban on smoking in all public places was adopted in October 2008 ­ with a penalty fine of
200 rupees (£3) for anyone caught.…read more

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The Smoking Epidemic in England
The highest rates of smoking in England were among men aged 25-34, where
prevalence was estimated at 40%
There were large spatial variations in smoking across England, as rates varied
between 20% and 40%
It was estimated that between 1998 and 2002, an annual average of 86,500 deaths
were caused by smoking in England.…read more

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British American Tobacco
British American Tobacco is the second largest tobacco company in the world ­ employing
over 60 000 people.
In 2009, it had a turnover of more than £40 billion, generating profits of £4 billion.
BAT sells tobacco brands in more than 180 countries.
It is the market leader in 50 of them, and has over 250 different brands.…read more


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