The first theory of the theory of capital movements is (theory of capital movements). The theory is based on the presentation of pure competition (perfect competition), which implies: a) the production of homogeneous products in a large number of firms; b) the absence of barriers to entry from the business; c) free access to the box information; d) absolute mobility in all factors of production. According to the orientation of the movement of capital, the PZI can be explained from the point of view of differentiation of profits and interest rates in various states. In other words, this theory confirms that the company crosses national borders with a view to obtaining more profit from foreign countries in comparing the expected activity in the domestic market. Obviously, this approach pre-determines the consideration of the PICs in one of the forms of international movement of capital, accompanied by the acquisition of control, and the transfer of technology and management experience.
It is important that these benefits be shared with international mobility and more cost-effective, connected with the need for human beings, the nature of the environment and the adaptation of new economic, political and social and cultural factors to the international business in a foreign country, including expenditures, as well as with the cultural and legal factors of the international business in a foreign country, including expenditures, as well as with the social factors of the international community in a foreign country, including costs.
The benefits considered are the name of “firm-specific advantages or ownership advantages” (firm-specific advantages or ownership specific advantages) and material tangible and intangible assets.
The theory of market imperfections is always important in explaining the processes of horizontal and vertical integration. Horizontal integration arises from firms that produce similar or homogeneous products with the goal of their subsequent implementation through a general distribution system and obtaining with this additional profit. In the international business, horizontal integration is accompanied by the production of goods abroad, similar to those produced in the cross-platform. Chrisler, General Motors, Volkswagen, Toyota, Honda are examples of TNCs actively using horizontal integration in their international activities.
Vertical integration presupposes a combination of firms operating in different production cycles. As a rule, the company which is engaged in the main, key production by means of vertical integration controls the firm leading the complementary production.
One key difference between integration and internalization, according to R. Grossai D. Kudzhava, is that the internalization additionally covers transactions that are in non-spherical vertical or horizontal integration, such as the acquisition of capital, labor, and technology.
Thus, the theory of internalization provides an explanation of the economic mechanism of TNCs, and also determines the main criteria and the selection of specific forms of foreign activity