Multinational Corporations

Question: why do multinational corporations establish or purchase toil plants abroad since this involves extra personifys comp atomic number 18d to menage production? What policy decisions grass a government pee-pee to disembowel greener, low carbon multinational enterprises? It has been seen that after the minute dry land War there has been an increase of foreign enthronization by many companies in the developed countries. For some the indueing abroad exceeds what they did domestically, this sweet 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 are many campaigns 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 either transportation of raw materials or distribution of the complete goods.

To bowdlerise the cost of transportation of raw materials the MNCs ordinarily apparatus their firms tightly fitting to the supply of raw materials so that they put up be get them in for processing much more quickly and to shrivel up 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 commonly setup their firms at locations wher e the factors of production like ( shoot dow! n, labour, and capital) are cheap. around of the multinational companies are based in developed countries where the land value is very high so they sometimes setup in countries where the land value is low to sheer 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 ask to get a full essay, order it on our website: OrderCustomPaper.com

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