Discuss the impact of MNCs (Multi-National Companies) relocation on the host country.
Discuss the impact of MNC´s (Multi-National Companies) relocation to the host country.
A Multi-National Company (MNC) is a business which trades in one or more countries. MNC´s are major contributors to accelerating the globalization process creating increased global interdependence.
Generally, MNC´s outsource or offshore their production, or portions of their production process to emerging economies (e.g India) in search of lower production costs, grants, relaxed laws and legislation etc.. and this brings with it both positive and negative impacts for both the source and host country.
By outsourcing production, MNC´s create massive employment in the host country, making disposable incomes of those employed rise, contributing to a general rise in well-being. Furthermore by employing they provide workers with training and skills that make them experienced and specialized hence increasing their chance of being employed again. MNC´s also generate big amounts of revenues to the host government through tax (e.g corporation tax) which can be spent in improving healthcare, infrastructure etc…