Multinational Corporations

1681 Words Feb 25th, 2011 7 Pages
Question 1:
As Multinational Corporations (MNCs) have become a growing force in world trade they have attracted supporters and critics. Briefly discuss the arguments put forward by both sides. Explain how the WTO Organisation assists in managing world trade.

Advantages and disadvantages of MNC’s:
Advantages:
• MNC’s impact on host country: • Capital Formation (money which comes into the country) • Technology transfer • Regional and sectoral development • Internal Competition and Entrepreneurship • Favorable Effect on Balance of Payment • Increased Employment • Offering a wider product range

Disadvantages:
MNC’s impact on host country: • Industrial dominance (keep buying the other companies) • Exploitation of
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In case the products will not sell, it is easier to go out of the market. On the other hand if the product sells good, there is the opportunity to sell more capacity or diversify by launching other products. Furthermore the New Caledonian company can first gain some experiences and learn about their mistakes in order to be more successful and sell higher quantities. Beside the Australian market can be entered more rapidly
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