A multinational corporation is a conglomerate that functions
and operates in several other countries besides the home country. These MNCs retains
an influential sphere on the global as well as local economies. Countries experience benefits from these MNC’s
in terms of globalized relations, consumer benefits, employment opportunities
and many others. Similarly their entrance could be a threat on local companies as
their commencement would lead to more competition.
To take a closer
glance on the MNCs impact on host countries lets first discuss its positives
that could help in the growth and development of host country.
- First of all MNCs encourages foreign trade which make sure inflow of foreign capital that could lead to country’s advancement.
- Their entrance in an economy ensures research and development in the host country which flourishes its infrastructure and other concerned domains.
- MNCs not only contribute and encourage financial resources but also develop expertise as well as entrepreneurial propensity among the citizen of host country.
- MNCs tax payments help the government of host countries to generate enormous revenues which can be used for further development of a country.
- Employment opportunities are generated with international standards.
- Also standard of living of a country increases due to latest services and technologies used by these countries.
In contrast MNCs have their drawback too:
- The MNCs sometimes become a threat to the local companies and hinder their expansion.
- Also, sometimes they reinvest their revenues in order to expand their projects and the government remains devoid of generating revenues.
- With higher income packages they attract the intellectual youth of the nation and so the local organizations suffer the loss.
- Also, their distribution of income results in economic inequalities due to the high packages offered as their employees encompass superiority complex.
- Due to monopoly these MNCs exploit the regional market.
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