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Role of Mnc's in Economic Development of Pakistan and India

In: Business and Management

Submitted By sameenzia
Words 2859
Pages 12
“MULTINATIONAL CORPORATIONS”
A multinational corporation has its facilities, subsidiaries, and other assets in countries other than its home country. A multinational corporation is also known as multinational enterprise . Businesses are always running after profits, therefore, they try to find out ways to decrease the cost as much as they can e.g. cheaper labor to bring about efficiency because it cuts cost of production.
The concept of MNC’s originated from Western Europe particularly England and Holland. At that time, with the help of successful trades a lot of banks and money lending agencies emerged. Later in 17th and 18th century, companies like Hudson Bay Company, British East India Company, and French Levant Company emerged as the major multinationals at that time. The modern version of Multinationals emerged after the industrial revolution. During that time, huge foreign investment flowed from Western Europe in Asia, Africa etc. Companies started searching for countries where the labor as well as the resources was cheap and still today, when the no. of MNC’s have reached around 889450, the companies are still searching for countries where they can find much more cheap labor and other resources.
A very important factor regarding the topic of MNC’s is globalization. Friedman defined globalization as:
“Globalization is the inexorable integration of markets, transportation systems, and communication systems to a degree never witnessed before -- in a way that is enabling corporations, countries, and individuals to reach around the world farther, faster, deeper, and cheaper than ever before...”
The relationship of Globalization and Multinationals is complementary. As the world is moving towards globalization, the businesses around the world are now establishing themselves in many other countries other than the mother country. That’s because globalization...

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