Role of Multinational Corporations (MNCs) in Foreign Investments!Multinational corporations are those large firms which are incorporated in one country but whichown, 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 businessactivities. The movements of private foreign capital take place through the medium of thesemultinational corporations. Thus multinational corporations are important source of foreigndirect investment (FDI). Besides, it is through multinational corporations that modern hightechnology is transferred to the developing countries.The important question about multinational corporations is why they exist. The multinationalcorporations exist because they are highly efficient. Their efficiencies in production anddistribution of goods and services arise from internalizing certain activities rather than contract-ing them out to other forms.