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What is a multinational company (MNC)?
an organization that operates in two or more countries
What is a transnational corporation?
head offices in other countries
Why have MNCs grown considerably over time?
benefits of being such super-sized businesses
Why do businesses become MNCs?
increased customer base
cheaper production costs (inexpensive labor)
economies of scale
brand development and brand value
avoid protectionist policies
spread risks
What is a host country?
any nation that allows a multinational company to set up in its country
Positive impacts of MNCs on host countries:
Job creation
Higher national income
Knowledge and technology transfer
Increased competition to incentivize local firms to be more efficient
Negative impacts of MNCs on host countries:
Job losses
Repatriation of profits
Vulnerability
Social responsibilities
Competitive pressures
What are trade protectionist policies?
promotes/boosts domestic products in the country + imposes tariffs/limits on foreign goods + services in the marketplace
What is gross domestic product (GDP)?
total monetary/market value of all the finished goods + services produced within a country’s borders in a specific time period
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