Question

what do you think about mutinational companies, good or bad for our economy?

Answer 1

Answer :

Mostly/overall, we can conclude that the Multinational Companies are good for our economy. There are also some negative impact but positive impact dominates this.

Positive effect of MNC's on overseas countries in terms of employment and income;

1. MNC will create jobs in the country they locate in. Unemployment levels will be reduced.

2. Higher employment levels mean that people will earn more money. This increase in income will be spent in that countries economy. (domino effect)

3. Jobs are created indirectly because the MNC have created jobs directly by setting up the business in that country. As a result of this other local jobs are created. (look in the book if you dont get this example)

Positive effect of MNC's on overseas countries in terms of local business:

1. Higher employment levels, higher income levels, higher purchasing power

2. Increase in trade and GDP

Positive effect of MNC's on overseas countries in terms of the economic growth, tax revenues and etc.

1. Government will get an increase in tax revenues from the overseas companies (income tax, corporation tax), this leads to economic growth

2. This will lead to an increase by the overseas government in the public sector (schools, health care)

3. As a domino effect this should increase the standard of living / HDI

MNC's also influence other aspect in a negative when coming to other countries. For example ;

Race to the bottom: Workers can get exploited in less developed countries, by underpaying or having bad working conditions. This results in demotivation and can affect the quality of the products produced.

Cultural Imperialism: Culture is about views, beliefs, experiences and etc. MNC's can come and impose their own culture inappropriately in a foreign country, this can be seen as offensive and ca ruin the beliefs and culture of a different country.

Environmental impact: MNC's who extract materials such as oil, gas, coil could be harming the environment due to noise pollution, air pollution etc.