Multinational Coporations and the Third World Concerns

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Introduction

         Twentieth century is different from the rest of the other centuries because of the new dimension of global economic difference and due to development of modern technology this has brought dramatic changes in the international economic system like technology development  in terns of communication and transportation.

    This increase the economic  and financial links between the states which led to the dependence of the world economies.This link led to periodical phenomena of multinational corporation.These Multinational corporations (MNC'S) internationalized world economic system increasing inter -state dependency and turning the world into a global village means due to developments.

 

According to J.K thomb

    A multinational corporation is the business enterprise legally situated in more than one country,whos commercial activities are of a large scale enough to have a considerable impact on the economies of both parent and host countries.

Extent of spread of the MNC's

      Management during the post world war 2,the multinational corporations have come to dominate global investments,international production,finance,trade and technology,reliable date regarding the spread of MNC's.Their subsidiaries,extent of investment profit etc are not available.

 Advantages of MNC's

The MNC's have been playing a very important role in the economic development of the LDC's and have been confering the following advantages

  • Law of capital
  • Improved standard of living
  • Employment opportunities 
  • Tax payment
  • Advanced technology
  • Managerial skill
  • Increase comptition
  • New techniques
  • Investment of LDC's
  • New ventures

Disadvantages of MNC's

  • NEO-colonialism 
  • Increase dependencies 
  • Conflict of investment
  • Resources stealing
  • Capital out flows
  • Creation of monopoly
  • Over payments
  • Maintenance of secrecy

  Conclusion

     Even though on certain counts,role of MNC,s in developing countries can be un-favorable to the latter.It must also be appreciated that if appropriate precautions are taken.the MNC's can be agents of economic development and progress of modernisation of LDC's.The MNC's by establishing factories producies consumer and especially capital goods in LDC's by importing training in modern industrial techniques,management and organised skills and by helping to exploit natural and human resources can help solve the problems of un-employment and poverty.That prevail in most of LDC's.

 In order to keep the MNC's under check,the host country must have marginal share with them and in this way the adverse effect of these MNC's can be minimized.

  

    



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