Can You Explain Multinational Corporations And Its Role?


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Muhammad Abdullah786 Profile
A multinational corporation is a company that owns and controls productive activities in more than one country. The MNC's have a base usually in one country, says USA, and its subsidiaries in other developed and underdeveloped countries. The MNC's may enter into joint ventures with some companies in other countries for the production, marketing of one another's products.

The huge business corporations are mostly from America, Japan and Europe. Money of MNC"S like coca cola, wills cigarettes etc have annual sales volume in excess of the entire GNP's of the developing nations in which they operate.
The MNC's are playing an important role in the economic development of developing countries.

The investments are made by MNC's helps in filing the saving investment gap.
The second contribution is of filling the foreign exchange or trade gap.
The government of the developing countries are able to fill up the revenue gap targeted government tax revenue and locally raised taxes by taxing the profits of the MNC"S.
MNC's fills the gap in management, entrepreneurship technology and skill in the developing countries.

The arguments for the and against private investment are quite weightily. A developing country must safeguard its interest before entering into contract with MNC's.

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