MNCs are not just exporters they have physical operations abroad.

Apuntes

MNCs are not just exporters, they have physical operations abroad. Motives are often a mix of growth, efficiency, and strategic positioning. IB BUSINESS MANAGEMENT 1.6 MULTINATIONAL COMPANIES Operate in multiple countries: HQ in one, subsidiaries abroad Large scale: global supply chains, high capital, strong brands Market power: influence prices, standards, regulations Transfer pricing: shift profits between countries for tax advantage Features of MNCs Market access: reach new customers, increase revenue Cost advantages: cheaper labor, lower taxes, raw materials Economies of scale: production and distribution efficiency Risk spreading: diversify across markets Proximity to resources: natural resources, skilled labor Reasons for expansion Jobs: employment opportunities, training, higher wages than local firms Investment: infrastructure, technology transfer, capital inflows Exports: improve balance of payments, increase GDP CSR: potential improvements in standards, sustainability projects Competition: drives local firms to improve efficiency and quality Positive impact on host countries Exploitation: low wages, poor working conditions, unsafe practices Profit repatriation: ...