Starting from an analysis of the impact of digitalization on transnationality, the paper
examines the impact of the rise of ICT and digital TNCs for theory and policy.
Conclusions include the following. (1) The rise of Tech - ICT and digital - TNCs
makes it compelling that economists devote more time to the incorporation of the
study of TNCs within the body of economics. (2) The theory of the TNC in itself may
need reconsideration on the basis of changes in the real economy in terms of the
growing relevance of digital TNCs. They pose theory challenges in that the foreign
assets component of international production is becoming less relevant while liquid
assets are increasing. We need to rethink our conceptualization and definition of
TNCs to fit in with the growing digitalization of the economy. (3) There are also great
policy challenges deriving from the differences in regulatory regimes between
different nation-states and characteristics of these TNCs. These challenges allow
TNCs in general - and the digital TNCs to an even higher extent – to: minimize their
tax liability; avoid responsibility for their workforce; affect the democratic processes
across countries
