Question

How pressure of expansion of trade and the increase in the number of Multinacional Corporation has led to a steady movement of work from higher-wage countries to lower-wage countries.

Answer 1

Expansion of trade and increase in the number of the multinational corporation has led to extension of business to other countries where there are lower cost of capital so that these can enlarge their market base and they can also have a new markets to invest into and they will be doing it at a lower cost so that they can even try to operate at economies of scale and they can remain competitive.

When there is a large number of firms who are increasing in the domestic country than the multinational corporations will be trying to expand themselves to other countries territory and they will be trying to take advantage of the lower cost which are available there and they will be trying to adopt the economies of scale in their global Business so that they can have a better diversification and they can also have a new market to invest into so they can increase their market profits and they can acquire the competitive edge to stay relevant in the longer period of time by maximization of the organisational value through diversification of the business by expanding itself into the international business and cost cutting methods.