Examine the impact of multinational corporations setting up in developing countries essay

Thence, the government oftentimes attracts companies to locate their subsidiary in a place where the substantial labor supply is resided in order to make employees being locally recruited.

Multinational Corporations - Essay Example

India also abolishes non tariff barriers and quotas regularly, reduce tariffs and open up its service sectors, which means India liberalizes its regime and create more conducive environment for trade and foreign investment.

Nowadays, the majority of MNCs consider the region of India as the platform for consecutive establishment of a new subsidiary company as it became popular region among the wide audience of other corporations in the era of economic globalization.

New enterprises constantly raise inward investments and if the government is capable to fill savings or inflationary gap with the foreign investments, it may achieve its target of economic growth.

The company offshore if they need to have their production getting done much faster through the global talent pool. Therefore, MNC seem to follow the idea of cost-minimization and profit-maximization more frequently, through process of outsourcing, at the expense of usage of cheap labor of another country, highly-qualified, reliable workers or even workers with specialized skills.

Thirdly, sometimes, when the country has a lot of significant resources, MNC invest into country for the purpose of getting access to RAW-materials, as a result of it; it may cause depletion of the resources.

Moreover, multinationals in the host country create a competitive environment on the domestic market; hence, domestic traders and market intermediaries increase their business activities.

There are also a number of oil companies and infrastructure builders from the Middle East. Amendments in Indian economy is frequently considered to be emanated from when India finally arrived at a decision to liberalize its regime and to change its restrictive policy concerning FDI to conservative one that currently shows enhancement on the Indian investment climate.

Trade balance is also changing; the country that was the biggest importer can probably become the biggest exporter in a short run. The largest acquisition is a transaction between the Indian company Tata Steel and Corus British in This time is specified by a considerable increase in FDI made by Indian multinationals.

Because of their huge resources, MNCs are able to diversify into various economic activities, pushing out indigenous companies in those fields. The role of MNC, from the government point of view, is that subsidiary companies helps to tackle with problems of development described above by investing new money into the circulation of domestic economy of particular country and organizing new workplaces for domestic workers.

MNCs in India very quickly managed the basic tools of the global market and successfully implemented in their activities applying the opened cross-border business opportunities in international trade engagement.

Multinationals became an opportunity to compete with successful companies from developed countries. India has a huge market for automobiles and hence a number of automobile giants have stepped into this country to reap the market. These products stimulate inappropriate consumption patterns through advertisement and their monopolistic market power, using inappropriate capital intensive technology.

Briefly, MNCs show an interest in investing in Indian market, while government attempts to liberalize many of its polices to attract a foreign capital by providing subsidies, reducing taxes and creating more loyal laws for MNCs.

Even if they do, they transfer, not the latest sophisticated technology, but obsolete technology.

India became a home for a huge amount of subsidiary companies since it started procedure of liberalization. French Heavy Engineering major Alstom and Pharma major Sanofi Aventis have also started their operations in this country. Moreover, corporations are beginning to invest abroad to ensure their access to sources of RAW-materials and natural resources gas, oil, copper, aluminum and steel.The Impact of Multinational Corporations (MNCs) on Developing Countries Essays - Multinational enterprises date back to the era of merchant-adventurers, when the Dutch East India Company and the Massachusetts Bay Company traversed the world to extract resources and agricultural products from colonies (Gilpin ).

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Essay on Multinational Corporations (MNCs)

Despite the fact that the investment activity of multinational corporations in India are considerably lower than in developing countries such as China or Russia, Indian companies continue to expand rapidly in the global economy, using modern tools and strategies for internationalization.

Multinational corporations were the vital factor in globalization, where local and national governments competed against each other in order to incentives and attract more MNCs and ultimately, investment in their countries.

There has been a very controversial debate over years now about the impact of multinational corporations setting up in developing countries, which have many supporters as well as opponents. Multinational Corporations (MNCs), also known as Transnational Corporations (TNCs), are enterprises operating in a number of countries and having production or service facilities outside the country of their origin.

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Examine the impact of multinational corporations setting up in developing countries essay
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