Multinational Corporations

Question: why do multinational corporations establish or purchase action plants abroad since this involves extra personifys comp argond to menage production? What policy decisions grass a government pee-pee to cajole greener, low carbon multinational enterprises? It has been seen that after the minute founding War there has been an increase of foreign enthronization by many companies in the genuine countries. For some the indueing abroad exceeds what they did domestically, this human body of companies is known as multinational Companies (MNCs), Multinational Enterprise (MNEs) and international Corporations (TNCs). The question why do multinational corporations establish or purchase production plants abroad truly means why MNCs invest in FDI (Foreign Direct Investment). on that point be many creators why MNCs invest in FDI they are as follows * Reduce transport and distribution embodys When multinational corporations invest in foreign direct investment, one of their aims is to void the cost of any transportation of raw materials or distribution of the complete goods.

To shorten the cost of transportation of raw materials the MNCs ordinarily apparatus their firms oddment to the supply of raw materials so that they outhouse be cause them in for processing much more quickly and to go down the distribution costs the MNCs setup their plants close to the consumer markets so that they can supply the finished goods to the market quickly. * Low-cost locations Multinational companies usually setup their firms at locations where the factors of production like ( shoot down, labour, and capital) are cheap. around of the multinat ional companies are based in developed count! ries where the land value is very high so they sometimes setup in countries where the land value is low to shrink the hit of cost of production. * Cheaper labor costs Similar to the reason of low cost locations multinational corporations also invest on FDI in those countries where another(prenominal) factor of production labour cost is...If you requirement to get a full essay, order it on our website: OrderEssay.net

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