The Service Transnational Corporations' Expansion And Host Countries' Economy

These years we have witnessed the rapid development in the service sector. Dominant status has been hold in both developed and developing countries. The development of ICT has changed the nature of the service item and product, and enhanced the tradability and preservability of the service product. The FDI in service sector has expanded quickly and recomposed the form and mode of TNCs: the main enter modes are M&As and no-equity. This changed the character of TNCs impact on host economy.This paper suggests that comparing to the internationalization of the manufacture sector,the service transnational corporations(TNCs) plays a different role in the host economy obligated by the nature of service. As for the rapid growth of service TNCs in recent decades, it takes time for people to become familiar with its development. The character of service determined that service TNCs expanded in three forms as equity and more no-equity, more offshore. Therefore the definitions of the service TNCs FDI are in term of output earning or add value, other than the manufacture TNCs.Actually, the strategic status of service industry in countries economy determined that it impacted on host economy more profoundly and difficultly to be assessed than manufacture TNCs. It incorporated in microeconomics'effect as services provision competition and crowding out and macroeconomics'effect as employment, financial resources and balance of payments, economics'risk. Whether host country could obtain net revenue was determined by the initial condition and policy, especially by the market structure and supervisor frame in host service Industry.