Chapter 20.3, Problem 1R

To determine

To Discuss: The significance of Multinational and Foreign Affiliates

Explanation of Solution

The important significance of multinational companies and corporation is that it brings innovative ideas in the economy to develop the economy rates as well as the employment rates, as the multinational covers mostly all the sectors of the economy, whether it is industrialization, the infrastructure, increases the facility of imports and exports in the other country, thus results in growth in exchange rates.

The MNC’s are controlled by experienced managers, which control a large share of funds, maintain various different activities, and global business operations.

The main significance of foreign affiliates is that they control the economy factors both internally and externally. The internal foreign affiliate refers to an enterprise that is controlled by a number of units as instituting from a different country. The external foreign affiliate refers under which the control of different institutions is maintained through outside economy conditions and their business is set up locally.