Question

Assess the reasons how the host countries are benefited by MNCs

Answer 1

Answer:

In short, these are the main benefits MNCs confer to their host countries.

i) Transfer of technology

ii) Learning of business mannerism.

iii) Strategic information sharing.

iv) Creation of jobs.

Elaborately,

• Provision of significant employment and training to the labour force in the host country
• Transfer of skills and expertise, helping to develop the quality of the host labour force
• MNCs add to the host country GDP through their spending, for example with local suppliers and through capital investment
• Competition from MNCs acts as an incentive to domestic firms in the host country to improve their competitiveness, perhaps by raising quality and/or efficiency
• MNCs extend consumer and business choice in the host country
• Profitable MNCs are a source of significant tax revenues for the host economy (for example on profits earned as well as payroll and sales-related taxes)