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A2 Economics Globalisation & MNCs. Aims and Objectives Aim: Understand the role MNCs play in globalisation Objectives: Define MNCs Examine the role MNCs.

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Presentation on theme: "A2 Economics Globalisation & MNCs. Aims and Objectives Aim: Understand the role MNCs play in globalisation Objectives: Define MNCs Examine the role MNCs."— Presentation transcript:

1 A2 Economics Globalisation & MNCs

2 Aims and Objectives Aim: Understand the role MNCs play in globalisation Objectives: Define MNCs Examine the role MNCs play in globalisation Analyse the effects MNCs have on LDCs Evaluate the usefulness of globalisation

3 MNCs ‘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.

4 Globalisation’s Offspring What are the major benefits of the growth of MNCs? What are the advantages of rapid globalisation to MNCs?

5 MNCs Not only investing in developing countries. Value of Inward Acquisitions of UK Companies 1986Q1-2009Q3

6 MNCs Impact on LDC will depend on… 1 Willingness to meet the needs of the host economy – employment, training, environmental protection. MNCs aware of costs involved, but also potential negative press. 2 Ability of host government to regulate activities effectively and not overlook human rights / health and safety to attract FDI. 3 MNCs 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. 4 MNCs are extremely mobile and if economic climate in host country deteriorates, they will switch production and move elsewhere causing unemployment etc.

7 Globalised Countries

8 ‘The Economics of Globalisation’ Globalisation booklet Spider diagram of argument for and arguments against globalisation. Bullet point effects on UK economy Bullet point effects on developing countries


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