Explain the role of MNC in economy ?
Answer should be atleast in 7 points .
Class- 10th
Chapter - Globalisation and the Indian Economy
I swear if you give me useless answer your ID will be reported and strict action will be taken .
Answers
Answer:
It is the giant multinational corporate firms (MNCs) which spend a lot on the development of new technologies can greatly benefit the developing countries by transferring the new technology developed by them. Therefore, MNCs can play an important role in the technological up-gradation of the Indian economy.
Explanation:
Multinational corporations are those large firms which are incorporated in one country but which own, control or manage production and distribution facilities in several countries. Therefore, these multinational corporations are also known as transnational corporations. They transact business in a large number of countries and often operate in diversified business activities. The movements of private foreign capital take place through the medium of these multinational corporations. Thus multinational corporations are important source of foreign direct investment (FDI).
Besides, it is through multinational corporations that modern high technology is transferred to the developing countries. The important question about multinational corporations is why they exist. The multinational corporations exist because they are highly efficient. Their efficiencies in production and distribution of goods and services arise from internalising certain activities rather than contracting them out to other firms. Managing a firm involves which production and distribution activities it will perform itself and which activities it will contract out to other firms and individuals.
In addition to this basic issue, a big firm may decide to set up and operate business units in other countries to benefit from advantages of location. For examples, it has been found that giant American and European firms set up production units to explore and refine oil in Middle East countries because oil is found there. Similarly, to take advantages of lower labour costs, and not strict environmental standards, multinational corporate firms set up production units in developing countries.
What are MNCs:-
MNCs are the multi national companies who trade in another country as to earn profit.
Role of MNCs
Provide employment:- MNCs provide employment to unemployed people. They give opportunities to people to do jobs.
Increasing economy:- The MNCs help in increasing the economy of a country by selling their products.
Share technology:- MNCs share their technology as they come in a particular country with a motive of production. Hence, they also help in improving technology.
Provide job and opportunities:- They help people of a country to develop at international level.