In India, since the announcement of the liberalised foreign investment policy inthere has been a spurt in the number of MNCs as well as foreign collaborations. The multinational companies in India represent a diversified portfolio of companies from different countries. Though the American companies—the majority of the MNC in India—account for about one-third of the turnover of the top 20 firms operating in India, the scenario has changed a lot of late. Finnish mobile giant Nokia has a large base in this country.
What currently one of the main issues in the society and government of fast-growing regions is the emergence of new multinational enterprises, its domestic impact on the country where subsidiary companies are supposed to be allocated and its potential consequences of operation on the economic perspective of the host country.
One of the examples of fast-developing region is, for sure, South Asia. To be precise, the case of India will be examined in this work. The role of MNC, from the government point of view, is that subsidiary companies helps to tackle with problems of development described above by investing new money into the circulation of domestic economy of particular country and organizing new workplaces for domestic workers.
As a result of huge FDI, the economy receives a solid base for consecutive economic growth in terms of Gross Domestic Product GDP and sequential development of the region.
Many economists consider particular investments to be the most safest one of the proper shape of external finance for developing countries such as India or China due to the fact that they do not involve a considerable risk and have unlimited liability.
It is supposed that a big amount of subsidiaries companies of MNC attract more and more FDI that will definitely support to boost up production of outputs, the level of GDP and to increase the economic growth rate not only for India, but also for the whole south-Asia region due to engagement of India in international trade.
Despite the recent negative impact of the crisis, India still receives a large inflow of investments due to firstly, stability in external economic relationships that leads to getting more stable access to foreign market, secondly, that many consumers wish to use India as its own export platform.
India also abolishes non tariff barriers and quotas regularly, reduce tariffs and open up its service sectors, which means India liberalizes its regime and create more conducive environment for trade and foreign investment. Investors are not afraid of investing into India indeed.
They are pretty sure that foreign markets will be available to them on a continuing basis. Sharp economic growth, structural change played the main role in driving the changes in comparative advantage of India and hence, in the overall economic growth of the country.
Multinational Corporations Multinational Corporation may be defined as a company, which operates in number of countries and has production or provide services outside the country of its origin. In economic context, it is also called as transnational corporations TNC.
MNC show both negative and positive impact on the economy of the host country. India became a home for a huge amount of subsidiary companies since it started procedure of liberalization. MNC play a significant role in globalization and international affairs associated with the global market.
What are the reasons of increase in the amount of new multinational corporations? The bound between two terms is totally blurred; however, it is easily to be defined: Therefore, MNC seem to follow the idea of cost-minimization and profit-maximization more frequently, through process of outsourcing, at the expense of usage of cheap labor of another country, highly-qualified, reliable workers or even workers with specialized skills.
Moreover, disposition of input-sources are also taken into criteria of outsourcing as it reduces the cost of transportation and as a result, decrease the cost of production.
Another strategy of MNC is off-shoring that is more broad term. The company offshore if they need to have their production getting done much faster through the global talent pool. It helps to lower the cost of goods or services and more easily to hire skilled workers for lesser expanses on wages.
Basically, both processes are used on practice in fast-developing countries by MNC. Impact of multinational companies and its investment on the host country It is quite obvious that disposition of subsidiary company in the host developing country provides the region with a renewed financial foundation for further social and economic growth.
Nevertheless, the host country may undergo through the sophisticated period of dramatic decrease of codes of ethical conduct induced by establishment of a big amount of subsidiary companies.
Basically, codes of ethical conduct are involved to operate the demand of developing nation, rather than ensure marginal assistance of economic and social evolution. As a result, the companies constantly enhance the amount of investments and the host country operates within new capital that is being accumulated through the time.
The main advantages and disadvantages of MNC and the impact of FDI must be appropriately identified in order to avoid economic and social misunderstandings. Advantages From the financial perspective, the most significant favor is the new capital that??The latter is in fact one of the earliest entrants in the list of multinational companies in India.
There are also a number of oil companies and infrastructure builders from the Middle East. Electronics giants like Samsung and LG Electronics from South Korea have made a .
May 30, · is an American multinational mass media company and is the largest broadcasting and largest cable company in the world by revenue. It is the second largest pay-TV company after the AT&T-DirecTV acquisition, largest cable TV company and largest home Internet service provider in the United States, and the nation 's third largest home telephone service provider.
RE: MNC Culture is a boon or curse for the country? -Nishit Nilay (08/20/16) MNCs although are a good source of money to indians but Indians should not be a prey of brain drain and should try to have a .
Essay on Multinational Companies. Multinational companies are giant firms with their origin in one country, but their operations extending beyond the boundaries of that nation.
For reasons of marketing, financial and technological superiority, these multinationals are generally considered as a sine qua non of the modernisation of an economy. Essay on multinational companies are a boon to indian economy example narrative essay life Mount Saint Mary College, Newburgh Cayuga, do literature review on business now W th Street zip Multinational Corporation also knows as Transnational Corporation or multinational enterprise.
These three things have same definition and function. Multinational company is a company that have manage the business in one country or they called it headquarters and also have their branches of .