Foreign Investment

ere is my question: 1)What atomic number 18 the dangers of relying on international multinationals for economic growing? What should a nation do to c atomic number 18en by reversal such imbalances? give thanks!to serve me etutor answers: MNCs are, of course, of enormous benefit to countries, and particularly the UK. Overseas investiture in the UK now exceeds £370B, more of it coming from the US and the EU, and much of it rivet upon manufacturing. Hence MNCs contribute 25% of the UKs manufacturing tabooput, 35% of man. investment and 30% of our visible exports. The drawbacks are as fol low-spiriteds: 1. MNCs look for low cost locations and/or places where market access is easy. The UK fits the bill truly sound - low business taxes, cheap sites, relatively hardly a(prenominal) regulations, weakish unions and lowish comprehend costs, tariff-free access to EU markets. But ny of this can intensify - and consequently MNCs can then recon berthr their strategy, and pull out at short notice. The effect on national issue and work could then be very severe. 2. Though thither is lots technology transfer (i.e. domestic firms copy the advanced working practices comprise in most MNC plants) the more uncompetitive firms are possible to be taken over, or else may have to button up down, resulting in unemployment, and still greater dependency upon MNCs for domestic growth. 3.

wholly of the profits made by the MNCs in this country are repatriated to the parent company overseas - this is a net dodging on the invisible account of the balance of payments. 4. Any receding in the MNCs home country is likely to see a cutback in overseas opera tions, as confidence, sales and funds proh! ibitionist out up - many US companies are currently discriminating back on their overseas investments. In article of faith a nation needs to resort to supply side policies to correct such imbalances - in other words policies designed to recruit the growth of domestic firms, and thus reduce the reliance upon MNC plants. such(prenominal) policies might include: privatisation, opening up of monopoly markets to greater...If you want to go through a full essay, order it on our website: OrderEssay.net

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