StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Multinational Corporations and Their Consequences for the International Economy - Essay Example

Cite this document
Summary
Name Name of Professor Multinational Corporations and their Consequences for the International Economy Introduction A major component of the structural transformation in the international economy in recent years has been the expansion, globally, of foreign direct investment (FDI) and merchandize trade…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER92.3% of users find it useful
Multinational Corporations and Their Consequences for the International Economy
Read Text Preview

Extract of sample "Multinational Corporations and Their Consequences for the International Economy"

Download file to see previous pages

Several studies have reported the expansion of FDI and investigated the effect of such investments on host and home economies. The objective of this essay is to analyze and discuss the consequences of multinational corporations for the international economy. The Multinational Corporation and the International Economy The multinational corporation (MNC), also called international corporation, global corporation, transnational corporation (TNC), and so on, carry out globally all the operations that involve the standing of national states in the international economy (Frieden & Lake 1999, 167).

MNCs, with their surplus of inter-firm agreements and huge number of foreign partners, reach almost all forms of economic mechanisms and nations, making it an imposing entity in today’s international economy (Levy-Livermore 1998, 147). MNCs have been expanding and advancing all over the world quite dramatically. Even though these corporations from the highly industrialized nations still control the global landscape, MNCs from the developing economies are emerging rapidly and increasingly. Thus far, there is no generally recognized definition of multinational corporation. . Firms that participate in international business, however large they may be, solely by exporting or by licensing technology are not multinational enterprises.

As an outcome of the process of liberalization, multinational corporations have been expanding rapidly in the developing economies. Almost all of the foreign partners of these corporations are located in the developing countries. The eager acceptance of national governments of MNCs suggests that these corporations serve a major function in economic growth. They significantly contribute to the improvement of the host countries’ economy, technology, exports, employment, and domestic investment.

However, even though the host countries can gain more than a few benefits from these corporations, MNCs create numerous problems especially for the developing economies. They could tear down local companies through disproportionate competition, gain control of the market through acquisition of local companies or other ways (Ravenhill 2008, 278). The MNCs’ operations and technologies which are geared toward global profit capitalization may not be suitable to the availability of resources, the size of local markets, consumption requirements, and the phase of development of a number of the developing economies.

They may bring about rapid exhaustion of volumes of valuable, nonrenewable natural resources in the host country (Frieden & Lake 1999, 165). All these highlight the importance of a code of conduct for these corporations and a binding competition rules in the host economies. In addition, a number of MNCs are suspected of human rights violation and political manipulation.

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Multinational Corporations and Their Consequences for the Essay”, n.d.)
Multinational Corporations and Their Consequences for the Essay. Retrieved from https://studentshare.org/history/1455829-multinational-corporations-and-their-consequences
(Multinational Corporations and Their Consequences for the Essay)
Multinational Corporations and Their Consequences for the Essay. https://studentshare.org/history/1455829-multinational-corporations-and-their-consequences.
“Multinational Corporations and Their Consequences for the Essay”, n.d. https://studentshare.org/history/1455829-multinational-corporations-and-their-consequences.
  • Cited: 0 times

CHECK THESE SAMPLES OF Multinational Corporations and Their Consequences for the International Economy

Multinational Corporations and Sweatshops

This report "multinational corporations and Sweatshops" discusses multinational corporations that are obviously doing more harm to their workers and host countries than promoting equitable trade and international development.... By doing this, the industrialized countries have contributed to the international division of labor.... This is a trend that has been observed with nearly all multinational corporations across the globe.... owever, based on the critics discussed above, I can argue that the disagreement concerning the social responsibilities of the multinational corporations should not continue....
6 Pages (1500 words) Essay

Trade Liberalisation and Issues for Multinational Corporations

As Javier (2005, pS05) rightly delineate the term trade liberalisation as "the international trade of goods or services without tariffs or other trade barriers; the free movement of labour and capital between countries; and the absence of trade-distorting policies, such as taxes, subsidies, regulations, or laws, that give domestic firms or goods an advantage over foreign ones".... The outcomes of free trade are desirable for the developing countries in terms of rapid industrialisation and for the multinational corporations in the context of cheap labour and profit opportunities in the new market This report provides an insightful study on the issues encompassing multinational corporations underlying trade liberalisation between developed and underdeveloped countries in the world....
9 Pages (2250 words) Essay

The Analysis of Multinational Corporations

The paper presents an analysis of multinational corporations.... 19-120] explained that the global economy is causing the emergence of 'region states'.... These region states are economically integrating entities that primarily link with the global economy rather than their host country.... How just a single company can dominate a whole economy is evident from the Japanese giant Mitsubishi.... Today two corporations control 80 percent of the coffee production of the world; merely four corporations account for 87 percent of the world's tobacco industry, and two corporations--Boeing and Airbus have almost monopoly over civilian airplane production by having a share of 95 percent....
7 Pages (1750 words) Essay

The Effects That Multinational Companies Can Have on a Host Country

While the global village has seen… The effects are based on a number of variables that play an important part in the direction and future of the investments of these The many economic benefits to host countries have prompted many countries around the world, including developed and developing countries to focusing on attracting multinational companies or foreign direct investments as they are also called.... The targeting of these multinational companies has become an important development strategy as countries such as Ireland provide grants towards start up costs and research and development (Jensen 2006:38 )....
7 Pages (1750 words) Essay

Multinational Corporations and Their Consequences for the International Economy

This research will explore about the lives of multinational corporations and its consequences A Multinational Corporation (MNC) is an enterprise engages in Foreign Direct Investment (FDI) which possesses or built facilities, operates and controls value-added undertakings in many countries.... It bolstered the entry of the open information and open trade where commodities and services are exchanged via multinational corporations.... Economists posit that a company is considered multinational when it has nurtured a number of affiliates or has subsidiaries in other countries; operate in an array of services and operations globally; gather high rate or percentile of assets, revenues, or profits; its human capital, stockholders, and administrators composed of varied nationalities, and their offshore operations are extensive, ambitious, and inclusive of manufacturing, research and developments (Spero et....
9 Pages (2250 words) Research Paper

International Business and Multinational Enterprises

Many companies have resorted to illegal means of obtaining contracts due to the stiff competition in the international market.... The multinationals should jointly demand that the intermediaries comply with all the international anti-corruption rules.... A weak economy puts a heavy burden on people by lowering their living standards.... The author of this essay "international Business and Multinational Enterprises" focuses on global trade....
6 Pages (1500 words) Essay

Multinational Corporations and Living Wage

This work "multinational corporations and Living Wage" focuses on the question of whether a multinational corporation conducting business in a developing nation is obligated to pay its employees a living wage.... Activists have been seeking ways to improve the wellbeing of these employees by putting pressure on the multinational corporations to adhere to labor laws, prevent intimidation, better health and safety standards, and pay a living wage in their global sourcing operations (Varley, 2008)....
8 Pages (2000 words) Essay

Moral Responsibilities of Multinational Corporations in the Global Context

"Moral Responsibilities of multinational corporations in the Global Context" paper states that the multinational corporations are seen to promote justice through the support they offer to the weak states in the global market in the course of their operations.... multinational corporations are expected to show some level of moral responsibility towards the stakeholders who may be the government, consumers, suppliers, and society at large.... However, the level of responsibility varies from a multinational corporation to another and the question of how wide the moral responsibility of multinational corporations extends in a global context is based on several side constraints that are either strong or weak....
7 Pages (1750 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us