The Pros And Cons Of Trade Globalization

753 Words 4 Pages
The topic that I’m writing about is concentrated around globalization. More specifically trade globalization in the form of MNC’s, also known as multinational corporations. A multinational corporation is a company that is whose headquarters are located in one country but has subsidiaries of itself located in another country, thus making it a multi-national country. According to Kwan Choi, multinational companies arise because capital is more mobile than labor, and since cheap labor and raw resources can be found abroad in other countries, multinational companies establish themselves in those areas internationally. While the goal for these MNC’s are is to maximize all potential profit, the allocation of that profit can be in favor for the home country of the MNC or the host country that allow the MNC to set up in their country. In most cases, the home country gains more than the host country from investing their company in the global economy. The keyword stated above is investment. Foreign direct investment “refers to an …show more content…
Critics of MNC’s cite that the main reason that they chose to enter into developing countries is because of laid-back regulations, to avoid trade barriers, saving on transportation costs, and to secure cheaper land and labor. So, is it shameful for MNC’s to invest in developing countries in order to seek more relative gains? Living in a capitalistic society, the goal is to make as much revenue as possible, by supplying to as many buyers as you can, because if you don’t your competitor will. This competition can even come at the price of exploitation of developing countries for cheap labor and resources just to reach that goal, thus what leads to this paper. My research seeks to shed light on the impact that MNC’s play in helping countries develop within the economies that host

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