Question
Tue December 05, 2017 By: Janeta Yasmin

Compare the advantages and disadvantages of MNCs over developing and developed country....!!

Expert Reply
Tharageswari S
Wed December 06, 2017

Advantages of MNCs- developing countries

  • The industries of developed country get latest technology from foreign countries through MNC's.
  •  The investment level, employment level, and income level of the developing country increases due to the operation of MNC's.
  •  They can reduce imports and increase exports due to goods produced by MNC's- balance of payment.
  •  Greater availability of products for local consumers
  •  MNC's break protectionalism, curb local monopolies, create competition among domestic companies- enhance their competitiveness.

Advantages of MNCs- developed countries

  •  MNC's create opportunities for marketing the products produced in the developed country throughout the world.
  •  They create employment opportunities to the people both at home and abroad.
  •  It gives a boost to the industrial activities of developed country.
  •  MNC's help to maintain favourable balance of payment in the long run.
  • They can also get the benefit of foreign culture brought by MNC's.
  • They get benefit from several research and development activities.

Disadvantages of MNCs

  • Foreign investors created regional disparities
  • Slow down in the employment in home countries
  • Destroy competition and acquire monopoly
  • Indians spend their money on a variety of global brand sin market
  • Qualified persons are posted abroad in their foreign subsidiaries
  •  Large sum of foreign exchange flows out of the country
  •  Trade restrictions imposed at the government level
  •  Limited quantities (quotas) of imports
  •  Effective management of a globally dispersed organisation
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