Multinational Corporations Play A Important Role Of The International Economy

1955 Words Dec 8th, 2014 8 Pages
Mitchell C. Zuriarrain
Prof. Ryan Opsal
INR-3703
8 December 2014 Multinational corporations play a very important role in the international economy, the help to act as financial pipelines to countries with low capital. In return, large amounts of wealth is created, which is created through the “Crowding-In” effect. This effect basically occurs when their is an increase in outside private investment as the debt-financed government spending increases. It is caused by the government boosting their demand for goods, which increases the private need for more technology like factories and industrial capabilities. Because of this new taxes are brought up from MNC generated income, this allows for these under developed countries to do infrastructure improvements and educate their population to strengthen their human capital. It is obvious that if used properly, MNCs help to increase the flow of capital to impoversished nations which overall helps to reduce the poverty levels globally and aides in holding up the United Nations mission, which is encouraging nations to seek peaceful solutions to both internal and external conflicts.The resent tread of MNCs follow the role in supporting the United Nations, through helping less developed nations achieve political and economic milestones in an environment that doesn 't involve massive foreign government involvement and attracts foreign direct investment (FDI). Most nations that lack FDI have very similar characteristics:…
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