2.2.1.d Multinational corporations (MNCs)

Definition of multinational corporations (MNCs):

• definition of foreign direct investment (FDI)
• reasons for emergence of MNCs/FDI:
  • to benefit from economies of scale
  • to access natural resources/cheap materials
  • lower transport and communication costs
  • to access customers in different regions.
• advantages and disadvantages of MNCs/ FDI:
  • creating jobs
  • investing in infrastructure
  • developing skills
  • developing capital
  • contributing to taxes
  • avoiding paying taxes
  • environmental damage
  • moving profits abroad.