Multinational Corporations in Globalization Questions and Answers
1 view 0 purchase
Course
MNC
Institution
MNC
Multinational Corporations in Globalization Questions and Answers
Multinational Corporation MNC
A large business organization operating in a number of different national economies.
What happens to MNCs in times of globalization?
They have an increased role.
Previous
Play
Next
...
Multinational Corporations in
Globalization Questions and Answers
Multinational Corporation MNC - answer A large business organization operating in a
number of different national economies.
What happens to MNCs in times of globalization? - answer They have an increased
role.
What will an increased role of MNCs lead to? - answer An injection of FDI in other
countries, particularly LDCs where labour and environmental regulations are less
prominent.
What are the effects of FDI? - answer A positive multiplier effect =
growth, employment, inflation.
Examples of MNCs - answer Nike, Sony, Apple, Toyota, Coca-Cola
Advantages of MNCs - Balance of Payments - answer Multinationals provide an
inflow of capital into the developing country. E.g. the investment to build the factory is
counted as a capital flow on the financial account of the balance of payments. This
capital investment helps the economy develop and increase its productive capacity.
The inflows of capital help to finance a current account deficit. (Basically, this means
that foreign investment enables developing countries to buy imports
Advantages of MNCs - Employment - answer Investment provides demand for
labour, although poorly treated, and growth reduces cyclical unemployment.
Advantages of MNCs - How have liberal economists defended sweatshop labour? -
answer Paul Krugman and Jeffrey Sachs have argued that although employers are
paying too low wages. Often sweatshop labour is better than the alternative ofno paid
employment. Economies in south-east Asia have seen rising wages in recent decades -
showing that low wage economies can develop
Advantages of MNCs - Infrastructure - answer Multinational firms may help improve
infrastructure in the economy. They may improve the skills of their workforce. Foreign
investment may stimulate spending in infrastructure such as roads and transport.
Disadvantages of MNCs - Environment - answer Multinational companies can
outsource parts of the production process to developing economies with weaker
environmental legislation
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Pogba119. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $12.49. You're not tied to anything after your purchase.
