"The organization of economic activity produced in the two countries to" to be headquartered in the mother country (home country), and there are subsidiaries located in countries receiving investment (host country) by the expansion of corporations. of the country is called. Direct investment abroad (Foreign Direct Investment - FDI)
in most of the impact from the investment of MNCs Grunberg [3] that the transnational impact, both positive and negative to the mother country. investing and recipient countries The positive impact on the mother country, including (1) the MNCs have a rational decision (rational decision) deciding to invest in foreign countries as a measure to cope with increasing competition. The Corporation is invested may not be competitive in the international economic arena. So corporations have to shut down and bring unemployment in the mother country (2) MNCs help the economy of the mother country better. In particular, the export of goods from the mother country to the other countries where the company is located, and (3) the MNCs to integrate the economies of different countries together. Reduce nationalism (Nationalism), reducing international tensions. And promote the values of a liberal democracy. The negative effects caused to the mother country, including (1) to invest in foreign MNCs cause unemployment and reduce the importance of the industrial sector. (Deindustrialization) in the country and (2) multinational corporations to avoid paying taxes by going to set up branches in countries with low tax rates or no tax. And there is invoiced on the part of the recipient country investment (host country), the role of transnational corporations benefit (1) MNCs to transfer technology, products, capital and financial management techniques to. Developing countries (2) the entry of MNCs contribute to the growth of other investment in the recipient country. Especially businesses that feed the MNCs (3) the entry of MNCs stimulate business in the recipients investment vigilant and try to compete with MNCs and (4) the MNCs allow the state balance of payments as well. That is the result of investment by transnational investment recipient countries import less and export more. However, MNCs have a negative effect on investment recipient countries, namely (1) Multinational corporations often borrow money from financial institutions, investment recipient country. Make those financial institutions not to lend to small enterprises. Keep Business native (indigenous business) may not grow (2) multinationals tend to skimp on their knowledge of technology and transfer it to the recipient country fully invested. It is also used in the manufacture of high-tech workers do not rely so much. The employment rate in the recipients of investment did not increase as expected (3), sometimes multinational focused on manufacturing for export only. Without creating relationships with local companies. Making an investment of MNCs no externalities (spillover effect) on the economy of the recipient of investment (4) MNCs are hiring workers with cheap labor. And the welfare of workers is not enough. It also creates environmental problems, too, and (5) the MNCs want to see political stability and the country's economy received a major investment. So ignore those countries that have democracy or not. Respect for human rights much. Sometimes the investment of MNCs is like renewing the dictatorship in those countries.
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