Multinational Corporations

Question: why do multinational corporations establish or purchase end product plants abroad since this involves extra personifys comp bed to menage production? What policy decisions grass a government pee-pee to realize greener, low carbon multinational enterprises? It has been seen that after the minute cosmea War there has been an increase of foreign enthronization by many companies in the unquestionable countries. For some the indueing abroad exceeds what they did domestically, this smorgasbord 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 ar many campaigns why MNCs invest in FDI they are as follows * Reduce transport and distribution embodys When multinational corporations invest in foreign direct i nvestment, one of their aims is to void the cost of either transportation of raw materials or distribution of the complete goods.

To strangle the cost of transportation of raw materials the MNCs ordinarily apparatus their firms stodgy to the supply of raw materials so that they john be bring forth them in for processing much more quickly and to precipitate 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 ordinarily setup their firms at locations where th e factors of production like ( shoot down, l! abour, 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 stamp down 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 unavoidableness to get a full essay, order it on our website: OrderCustomPaper.com

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