Tetiana Melnik

  Liudmyla Kudyrko

  Liliia Samsonova


The purpose of the paper is to summarize theoretical studies in the field of contractual relations implementation in the modern strategies of TNCs economic competition on international product and resource markets, as well as to assess the impact of certain contractual relations types on the macroeconomic dynamics of countries integrated into the global value chains of TNCs. Methodology. Based on the World Bank Open Data and UNCTADSTAT, there was made the assessment of indirect socio-economic and innovative effects of contract production on the macroeconomic indicators of the individual countries development by means of the correlationregression method. Results. The influence of institutional, political, and economic restrictions that restrain the investment activity of international corporations on the international markets of finished and intermediate products is disclosed. A trend that complicates the forms and methods of external expansion in terms of more flexible latent forms, in particular, through contractual relations (subordinate production, licensing, franchising, contract management) is identified. The role of international contractual relations in measuring nonlinear formats of the externalization of TNC business is revealed. Exogenous (related to the institutional environment of the host-countries) and endogenous factors (the sphere of activity, corporate strategy, formed competencies and competitive advantages of the companies) that allow TNCs to obtain competitive advantages from the use of contractual relations in multi-level network structures with coordination mechanisms and management regimes are determined. Practical implications consist in the improvement of a theoretical and methodical approach to assessing international contractual relationships from the positions of microeconomic analysis (means TNC’s management strategies) and taking into account macroeconomic effects (means their influence on the macroeconomic development of the contracting and implementing parties is proposed). Value/originality. The article points on problems of expanding the practice of international contractual relations: optimization of taxation, predatory exploitation of human, technological and natural resources of host countries by TNCs, “freezing” of national subcontractors on the stages with low value added, distortion of export capabilities of host countries by products export imitation created by means of the foreign suppliers’ give-and-take raw materials and, as a result, the distortion of the balance of payments.

How to Cite

Melnik, T., Kudyrko, L., & Samsonova, L. (2019). CONTRACTUAL RELATIONS IN THE NEW ECONOMIC COMPETITION STRATEGIES OF TNCS. Baltic Journal of Economic Studies, 5(3), 116-124.
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international contractual relations, contract manufacturing, transnational companies, economic competition, international management


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