Role Of Mncs In Globalization

I. Introduction

Multinational Corporations (MNCs) in the global economy in these recent years has become the most important actors in doing international businesses, foreign investments, and world trades. The activities of MNCs play important roles in supporting economic globalization. The elements of business activities are also being considered in the MNCs. The MNCs in doing international business and world trades also have a strong relation with Foreign Direct Investment (FDI). There are also some arguments about the political involvement of MNCs in foreign countries whether it is appropriate to be done or not. In this paper I would like to discuss explain more about the roles of MNCs activities in supporting economic globalization, the

The activities of MNCs also play important roles in supporting economic in this globalization era. MNCs has several positive effects on the economic globalization in the world economy. MNCs plays its role as a modernizer of the world economy which means that it is articulated as a result of continuous and constant promotions of new technologies – especially introducing and promoting technologies to the developing economies, rural, and remote areas – and also present and introduce new innovations across the globe. This means that MNCs and industries are designed to be competitive in the economic globalization. The new innovations that are being introduced to the economic globalization can be in a form of technologies, educations, health care, medicines, and also social policies. The MNCs can create projects and bring progresses by educate and employ people in the poor economy countries. The MNCs also can distribute products that are relatively cheap to the developed markets by reducing or minimizing the production costs of many products. By providing services and goods, it can facilitate people’s lives; and also in addition, some goods and services can contribute to people’s high standard of

MNCs and FDI are interrelated to each other. Corporations must acquire a controlling stake in a foreign firm in order to become multinational – which can be done by creating a new foreign firm or by acquiring an existing foreign firm – and those methods involve an international capital flow which can be defined as Foreign Direct Investment (FDI). Multinational Corporations (MNCs) is the organizational form that defines Foreign Direct Investment (FDI). Foreign Direct Investment (FDI) is an investment that directly leads to productive activity within the host countries and it is very crucial for the development and the emergence of a country; and Foreign Direct Investment (FDI) benefits the global economy, investors, as well as the recipients. According to the data from the United Nations, some 35,000 companies have direct investment in foreign countries, and the largest 100 of them are controlling about 40 percent of world trade.

MNCs is known having a greater influence in the national economy comparing to trade. To attract MNCs facilities, national and local governments tend to compete with each other with the expectation they can increase their tax revenues, employment, and economic activities. In order to compete, the MNCs may being offered by the political entities of the country some incentives such as the tax breaks, pledges of subsidized