Explain How Mncs Benefit Both Rich And Poor Countries

Critics of TNCs argue that this ripple effect is a myth. Rather than benefitting those in the local economy, critics contend that the beneficial effects “leak out” of the local economy to benefit other places, chiefly back to the home nation (Shepard, Porter, Faust, & Nagar, 2009, p. 519). In addition, local firms may find it impossible to compete with the goods produced by the TNC due to beneficial tax breaks and the alleviation of labor restrictions that many TNCs enjoy in host nations (Shepard, Porter, Faust, & Nagar, 2009, p. 525). Employment by TNCs may also not benefit a host nation’s economy or people in a significant way. Wages for workers at many TNCs are low due to removal of employment regulations in places

I. THE REALLY OPERATIONAL SITUATIONS OF THE MULTINATIONAL COMPANY’S SUBSIDIARY IN CHINA THROUGH JOINT VENTURE WITH CHINESE COMPANY.

When a company decides that it is time for it to grow from a national into a multinational company (MNC) there are cost and benefits involved. A multinational corporation is a company that has productive assets, which they own and control in countries other than their own. An MNC is unlike an enterprise, which exports products and services, but the MNC directly invests into developing countries, where it can benefit from producing products at a lower cost, while increasing its market share. Whether this has a positive or a negative impact for the company and its host state, is dependent on the

TNCs dominate industrial production including manufacturing and services, therefore further dividing the gap between the rich and the poor, and being the main leader of globalisation as a consequence.

MNC’s may potentially bring a lot of benefits to the host nation, the company may invest in the host country and creating wealth and jobs. Multinational can raise the grown rate of the host country by bringing in new investment, new technologies or managerial competition, thereby induce their domestic rivals to become more innovative and competitive.Their size and scale of operation enables the company to benefit from economies of scale enabling lower average costs and prices for consumers. (Resource book)

TNCs trade technology in developing countries to increase production and the use of utilities which are not readily available. In return, this helps countries produce more to export and help TNCs make money and contacts by offering technology to the developing countries that would not otherwise receive easily. Secondly, TNCs help increase the use of technology by producing newer and more advanced technology for countries that do not have access to such advanced technology. This helps countries with GDP incite new ideas, making it easier to develop newer products from resources that are available, resulting cheaper production rates. Newer technology that TNCs offer with their power, help developing countries stay on top by inventing new and exciting material to receive such advantage. By offering technology countries cannot afford themselves, TNCs are able to keep power over the countries since they are offering them technology that they could not possibly have access to in any other way. By providing the countries with more technology, TNCs show a great advantage to

For example, BT, a company that has operations in around 170 countries, has shifted their customer call service from India to the UK. The exploitation of cheap labour has had both positive and negative impacts. 5,000 people that BT has employed in India have not only been supplied with a job but also with invaluable skills. The money that they earn would contribute to the family income, boosting the standard of living for both the employees and the employees’ family. The TNC is also puts money into the Indian economy, contributing to economic growth and boosting the countries GDP. Many countries (including India and Brazil) which were classified as developing countries, have become newly industrialised countries (NICs).

After reading the PPT. file and watched Globalization pro and con video, I saw that both of the globalization and TNC's, can be good or bad.

of the technology also creates many new jobs to people. There is a big need for the

As they grow, their dominance becomes stronger, and their influence over the economy is significant. These mega cities in developing nations are often major centres of manufacturing and labour intensive work. They have a high population and unemployment rate, which leads to cheap labour, as companies are able to employ large amounts of people at a low cost. This benefit therefore makes mega cities attractive destinations for TNCs. New York for example, has the United Nations headquarters located within it, as well as Google, American Express, and J.P.Morgan, and London, has the headquarters of Citi Bank, and Goldman Sachs. Therefore, TNCs influence in the global economy allows them to become chief competitors in the global market, and that developing nations are dependent on world cities for employment, and trade, and this gives world cities their economic authority.

Developing countries find it hard to put the technology into place, but with the help of the developing countries it is a lot easier.

Mncs grow their exercises to a remote nation for various mind including, among others, the misuse of economies of scale/CRO, the utilization of particular vantage, regularly owing to a life cycle example of their item or

Presently, there are over 35,000 multinational corporations (MNC) worldwide, controlling over 15,000 foreign subsidiaries and accounting approximately one-third of the global production. The developing countries that received the most multinational investment are those perceived to have the utmost development growth. They are commonly identified as newly industrialized countries and consist of Asian countries like China, Singapore, Malaysia, Thailand and Latin American countries like Mexico, Brazil and Argentina. The ten largest recipient of foreign direct investment receive nearly 95% of the totality, while the entire African countries set jointly obtain less than 4%. The poorest 50 countries of the world among them obtain less than 2% (Boyzk 2009).

This investment encourages entrepreneurship and breeds a culture of competition, increasing competitiveness amongst local companies, causing them to improve their own goods and services by increasing their efficiency and ultimately quality in order to better compete.

Developing country MNCs may have more experience as they used to doing so at home where home governments do not supply them goods. Therefore, MNCs may suffer for the ineffectiveness of the government which can lead to unexpected cost and also size of the operations being limited in the country. LDCs have lower government effectiveness which causes the government systems and establishments are slow and politically dependant, thus lead to lack of high quality of public goods.