2Aims and Objectives Aim: Understand the role MNCs play in globalisationObjectives:Define MNCsExamine the role MNCs play in globalisationAnalyse the effects MNCs have on LDCsEvaluate the usefulness of globalisation
3MNCs‘an enterprise that controls and manages production establishments – plants – located in at least two countries.Provide Foreign Direct Investment in countries (investments in the domestic economy in new manufacturing plants by foreign MNCs.
4Globalisation’s Offspring What are the major benefits of the growth of MNCs?What are the advantagesof rapid globalisation to MNCs?
5Value of Inward Acquisitions of UK Companies 1986Q1-2009Q3 MNCsNot only investing in developing countries.Value of Inward Acquisitions of UK Companies 1986Q1-2009Q3
6MNCs Impact on LDC will depend on… 1Willingness to meet the needs of the host economy – employment, training, environmental protection.MNCs aware of costs involved, but also potential negative press.2Ability of host government to regulate activities effectively and not overlook human rights / health and safety to attract FDI.3MNCs may expect abolition of trade laws, special tax rates, dispensations from labour laws like minimum wage.Some MNCs have been known to fiddle corporation tax in developing countries.4MNCs are extremely mobile and if economic climate in host country deteriorates, they will switch production and move elsewhere causing unemployment etc.