FALLSEM2015-16_CP0925_27-Jul-2015_RM01_Role-of-Multinational-Corporations-in-FDI - Role of Multinational Corporations(MNCs in Foreign Investments

FALLSEM2015-16_CP0925_27-Jul-2015_RM01_Role-of-Multinational-Corporations-in-FDI

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Role of Multinational Corporations (MNCs) in Foreign Investments! Multinational corporations are those large firms which are incorporated in one country but which own, control or manage production and distribution facilities in several countries. Therefore, these multinational corporations are also known as transnational corporations. They transact business in a large number of countries and often operate in diversified business activities. The movements of private foreign capital take place through the medium of these multinational corporations. Thus multinational corporations are important source of foreign direct investment (FDI). Besides, it is through multinational corporations that modern high technology is transferred to the developing countries. The important question about multinational corporations is why they exist. The multinational corporations exist because they are highly efficient. Their efficiencies in production and distribution of goods and services arise from internalizing certain activities rather than contract- ing them out to other forms.
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