1.6 Multinational companies

What is a Multinational company?

It is a business that runs operations in two or more countries

What are some reasons why businesses become MNC’s

-increased customer base

-global recognition → brand development and brand value

-cheaper production costs in other countries, such as inexpensive labour

-economies of scale

-to avoid protectionist policies

What are the positive impacts of an MNC on the host country?

-increased job opportunities

-gained knowledge/education/training

-increased competition which urges domestic firms to grow

What are the negative impacts of an MNC on the host country?

-earning get sent back to home country

-may put many domestic firms out of business

-may cause high amounts of waste or pollution