Mnc and Foreign Direct Investment in Malaysia

To be qualified as a multinational company (MNC), two criterions need to be fulfilled. Firstly, it needs to have substantial direct investments in foreign countries. Secondly, these international operations need to be actively managed (Bartlett, Beamish, 2014). Since

Malaysia is a country of democracy, a multiparty system. The ruling party Barisan Nasional has been in power for over 25 years. That fact has provided the country with a high degree of stability, which is an important factor for companies investing in the country. Corruption exists in the country. This may be an obstacle for foreign companies, as it increases the company's costs and could cause problems. Transparency International takes 47th Malaysia out of 180 countries in its Corruption Perception

Over the year’s organizations from, all parts of the world have experienced growth in the areas of business. Much of this growth is in part due to multinational companies, many of them enjoying significant benefits. One such area is investment, however it creates benefits for foreign MNCs, and it brings about concern. Perhaps the greatest fear. Fear concerning state owned corporations and the lack of effectiveness of legislation / regulatory enforcement.

Multinational corporations are business entities that operate in more than one country. The typical multinational corporation or MNC normally functions with a headquarters that is based in one country, while other facilities are based in locations in other countries. In some circles, a multinational corporation is referred to as a multinational enterprise or a transnational corporation .

When a company decides that it is time for it to grow from a national into a multinational company (MNC) there are cost and benefits involved. A multinational corporation is a company that has productive assets, which they own and control in countries other than their own. An MNC is unlike an enterprise, which exports products and services, but the MNC directly invests into developing countries, where it can benefit from producing products at a lower cost, while increasing its market share. Whether this has a positive or a negative impact for the company and its host state, is dependent on the

A multinational corporation (MNC) is a business firm incorporated in one country that has production and sales operations in several other countries.

For starters let us start with defining what is a MNC: a multinational corporation is a company that has more than one facilities in countries other than where their headquarters is located at. {http://www.britannica.com/topic/multinational-corporation} So General Motors, Atari, Boeing, IKEA, and Apple are all examples of modern international corporations. And if you look through many of your everyday items that you use you will find that almost everything you own is multinational. Which you may have to think about the next time someone tells you MNC’s are bring the New World Order to take over your land and country while using their IPhone 7.

One thing to be observed in case of the MNCs is that they have usually developed in a impulsive and unconscious manner. Very often they developed through "Creeping incrementalism" Many firms become multinationals by accident. Sometimes a firm established a subsidiary abroad due to wage differentials and better opportunity existing in the host country.

The investment of Malaysia increased from $26million in year 2003 to about half a billion dollars in year 2008.(The New Zealand -Malaysia Free Trade Agreement, 2009) Under the Malaysia FTA, there are investment protection provision which can ensure that Malaysian investors gain advantages rather than left out with disadvantages. Because the investment protection provision guarantee the foreign firms` investments are treated the same way as the domestic ones.

Multinational Corporation (MNC), sometimes called transnational corporation or international corporation, business that produces or distributes products or services in one or more foreign countries by establishing a branch or affiliate there. A branch is a part of a company that is located in another country. An affiliate is a company partially or entirely owned by another company. MNCs engage in foreign direct investment (FDI)—that is, investment in one country by citizens of another country. Sometimes such investment involves acquiring an existing company. In other cases MNCs undertake what is known as greenfieldinvestment by creating new facilities or activities.

A Multinational Company (MNC) is “an enterprise which owns and controls activities in different countries” (Buckley and Casson, 1991, p.1). According to Buckley and Casson (1991), MNCs have very high labour productivity, which creates very high profits. They are among the most rapidly growing businesses in the world. They even argue that MNCs might have a greater impact on world affairs than the government institutions of the countries where they trade. Even with all of this in mind, they can still be subject to limitations. In the end, MNCs have to consider that they are operating in a different environment, which may have different legal and political systems, institutions, and culture (Edwards and Rees, 2006). This is also known as the

The role of multinational corporations (MNCs) in emerging economies is growing, as shown by the growth of foreign direct investment (FDI), which in 2015 stood at $681 billion, up from $671 billion in 2013 (UNCTAD, 2015). Despite the above positive changes, some countries remain marginal areas in global terms. While emerging economies collectively account for 83% of the world 's population, they only account for less than 32 % of global gross domestic product (GDP) and FDI (UNDESA, 2015; WB, 2015). Consequently, the extent of economic and social challenges facing some developing countries remains enormous despite decades of MNC investments. One major social problem facing many of the emerging economies is still high levels of human poverty (UNM-MDG, 2015). Some African countries such as Zambia, are faced with the challenge of a large proportion of the population living in abject poverty (Gamu, le Billon, & Spiegel, 2015). The challenges prevail despite more than two decades of applying macroeconomic (basically structural adjustment programs) and microeconomic interventions (specifically through increased availability of microcredit) (Turyahabwa, 2014). According to the UN Millennium Development Goal Report of 2015 (UN-MDG, 2015), about 38% of the poor population in sub-Saharan Africa is chronically poor. At the current pace of development, the region is unlikely to achieve the Millennium Development Goals for poverty reduction within a stipulated time frame: by 2147

‘A Multinational Company (MNC) is a company has facilities and other assets in at least one country other than its home country. Such companies usually have a centralized head office and small offices in other countries’. If a multinational is large enough, they usually have a budget to

Malaysia government has a generally favourable attitude toward foreign investment, especially regarding projects that facilitate technology transfers, create high skilled jobs and contribute capital

Over 20 years ago, Malaysia was an agricultural based country. Then came the foreign direct investments initiative that gave many