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ROLE OF MULTINATIONAL CORPORATIONS IN DEVELOPING COUNTRIES
ABSTRACT
This is the fact that
under proper management of economic policies, multinational corporations are
the bed rock for developing countries and national integration as it provide
greater opportunities by exploration and discovery of our major mineral
resources were made possible by the MNCS(Multinational Corporations). And also, our major transport networks were
mostly developed by the corporations which provides development in many
countries.
Unfortunately,
this corporation can’t play this expected role largely due to financial
problem. Multinational corporation
concentrated in boosting agricultural product which form the ed rock of most
developing countries economy. Therefore,
financial constraint serves negative attention from multinationals.
With
this, I decide to write the extended essay title (The role of multinational
corporations in developing countries).
To explore various positive aspect of development.
Chapter
one of this extended essay deals with the introduction of the subject matter,
objective, significant, scope and limitation, and definition of the
terminologies.
In
chapter two, some related literature review on multination corporation were
review, some definition of multinational corporations, effect of multinational
corporation on the investing country. The role of multinational development,
creating avenue for direct investment, the effect on the host country and
positive and negative aspect of multination corporation were review.
Chapter
three deal with summary, conclusion and recommendation.
TABLE
OF CONTENTS
Cover
- - - - - - - - - - - i
Title
- - - - - - - - - - - - ii
Approval
- - - - - - - - - - - iii
Dedication- - - - - - - - - - - iv
Acknowledgement- - - - - - - - - v
Abstract- - - - - - - - - - - vii
CHAPTER ONE
1.0
Introduction- - - - - - - - - 1
1.1 Objective of the study- - - - - - - - 3
1.2
Significant of the study- - - - - - - - 4
1.3
Scope of the study- - - - - - - - 4
1.4
Limitation - - - - - - - - - - 5
CHAPTER TWO – Literature Review
2.0
Introduction - - - - - - - - - 6
2.1 Definition of multinational Corporation- - - - - 25
2.2
The Effect of multinational on the investing
country- - - 25
2.3
The Effect of Host Country - - - - - - 27
2.4
Creating avenue for direct investment- - - - - 29
2.5
Positive Contribution of MNCS to the Nigerian
economy - - 30
2.6
Negative Aspects of the Activities of MNCS of
the Nigerian
Economy- - - - - - - - - - 34
2.7
Needs for Government Control of
Multinationals; - - - - 41
CHAPTER
THREE -Summary, Conclusion and
Recommendations
3.1 Summary- - - - - - - - - - 46
3.2
Conclusion- - - - - - - - - - 47
3.3
Recommendations- - - - - - - - 47
Bibliography- - - - - - - - - 49
CHAPTER ONE
1.0
INTRODUCTION
A
multinational corporation is a company that has subsidiaries in several countries. Their decentralized structure, as well as
their degree size, often allows them to overstep governmental constraints which
smaller regional or national companies must observe.
Developing nations attracts multinational subsidiary
operations due to a number factors such as cheap labour, low taxation and less
vigilance concerning workers rights and environmental protection. They are made
to contribute to the social security net (i.e. welfare, unemployment insurance,
e.t.c) other factors including low pay for woman workers, child labour, and the
absence of labour unions, also combine to make the third world ripe for
exploitation. The presence of
multination in these countries improves overall living standards. The benefits of the relationship are most
often one sided, but the economic problems facing these nations makes it
difficult for them to be picky about their investor. Firms become multinational corporations when
they perceive advantages to establishing production and other activities in
foreign locations. Firms globalize their
activities in foreign locations. Firms
globalize their activities both to supply their home country market move
cheaply and to serve foreign markets more directly. Keeping foreign activities within the
corporate structure lets firms avoid cost inherent in arms length dealings with
separated entities while utilizing their own firm specific knowledge such as
advanced production techniques. By
internalizing what would otherwise by cross-boarder transaction multinationals
can bridge the information obstacles that often hinder trade. For example, they may be able to move
carefully monitor product quality or worker conditions in factories they own
than in those of contractors, or adapt the composition of output more quickly
to change in market condition.
Improvements in information technology have reduced the
impediments to exerting corporation control across boarders. These advances have combined in recent years
with an increased openness on the part of government to foreign multination, as
the economic benefits of a foreign presence to the host country have become
more widely recognized. These benefits
include the increased investment and the associated jobs and income that the
multinational firm brings, as well as technological transfer and improved
productivity. The role of multinationals
in spreading industry best practices is likely to be especially important
services, many of which are not easily traded across national boundaries.
Evidence of the heightened role of multinationals can be
seen in the quickened pace of Foreign Direct Investment (FDI) in recent years in 1991 FDI flows both in and
out of other European country development (OECD), reached regard level; over
2.5 percent (%) of their combined gross domestic product (GDP) for in flow and
3.0 percent for outflow. Most of foreign
direct investment is between developed countries, since 1982, 75% (percent) of
FDI out flow from OECD countries have gone to other OECD members.
SOURCE: United Nation Multinational Corporation in world
development New York (2000).
1.1 OBJECTIVE
OF THE STUDY
The
main objective of this study is to critically look into the activities of those
multinational corporation in their host nations mostly developing nations if
their existence has positive or negative impact on the development of the host
country.
1.2
SIGNIFICANCE OF STUDY
The
following were the significance of this study: -
i.
It will be a source of knowledge expansion to
me
ii.
This research work will be my contribution to
knowledge.
iii.
It will serve as source of data for others
who may carryout research work on some or related topic in the future.
iv.
It will also serve as point of reference to
policy makers in their relationship with matter concerning multinationals.
v.
This research work will be a companion to
decision makers on foreign investment in the country. Mostly when the fire of foreign investment is
at higher level in the country.
1.3
SCOPE OF THE STUDY
The essay work will cover the following areas of study in terms of the
activities of multinational corporation, their roles as an agent of the
development, their contribution towards development, the prose and coin i.e.
advantage and disadvantages of their activities. It will also examine their negativity in the
area of profit send to their home ration.
1.4
LIMITATION
Due to the following constraints such as inadequate books or the topic
posed a serious constraint on the write up some of the date needed for this
write-up are not available at the time this write up services carious out.
It is prominent to note that no one has every thing to
himself. In everything, there arises
some constraints, so it is in the case of this essay
i.
Financial
problem; This problem is a
great one especially in this present day economy recess in with inflation, sky
rocketed prices of materials, where people are struggling to live within their
limited resources. This is especially
applicable to a student who depends largely on others, among lost is that of
transportation to and fro, the place of research, in some cases would have to
trek for long distance.
ii.
Time: Time factor is another constraint, which the
writer encountered. Such as combining
class activities i.e. test, assignments, lectures and exams with the project
work other include the drudging of read and writing from one item to another in
the attempt to accomplish the task.
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