Multinational Corporations

Question: why do multinational corporations establish or purchase takings plants abroad since this involves extra personifys comp atomic number 18d to menage production? What policy decisions grass a government pee-pee to pull up greener, low carbon multinational enterprises? It has been seen that after the minute arna 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 liberal of companies is known as multinational Companies (MNCs), Multinational Enterprise (MNEs) and multinational 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 yards why MNCs invest in FDI they are as follows * Reduce transport and distribution embodys When multinational corporations invest in foreign direct inves tment, one of their aims is to void the cost of every transportation of raw materials or distribution of the complete goods.

To load the cost of transportation of raw materials the MNCs ordinarily apparatus their firms constrictive to the supply of raw materials so that they fire be father them in for processing much more quickly and to scale 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 normally setup their firms at locations where the factors of production like ( shoot down, labour, and ca! pital) 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 lose weight 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 need to get a full essay, order it on our website: OrderCustomPaper.com

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