negative impacts of mnc in host country
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ᴛʜᴇ ᴘᴏᴛᴇɴᴛɪᴀʟ ᴅʀᴀᴡʙᴀᴄᴋs ᴏғ ᴍɴᴄs ᴏɴ ʜᴏsᴛ ᴄᴏᴜɴᴛʀɪᴇs ɪɴᴄʟᴜᴅᴇ: ᴅᴏᴍᴇsᴛɪᴄ ʙᴜsɪɴᴇssᴇs ᴍᴀʏ ɴᴏᴛ ʙᴇ ᴀʙʟᴇ ᴛᴏ ᴄᴏᴍᴘᴇᴛᴇ ᴡɪᴛʜ ᴍɴᴄs ᴀɴᴅ sᴏᴍᴇ ᴡɪʟʟ ғᴀɪʟ. ᴍɴᴄs ᴍᴀʏ ᴍᴀᴋᴇ ᴜsᴇ ᴏғ ᴛʀᴀɴsғᴇʀ ᴘʀɪᴄɪɴɢ ᴀɴᴅ ᴏᴛʜᴇʀ ᴛᴀx ᴀᴠᴏɪᴅᴀɴᴄᴇ ᴍᴇᴀsᴜʀᴇs ᴛᴏ sɪɢɴɪғɪᴄᴀɴᴛ ʀᴇᴅᴜᴄᴇ ᴛʜᴇ ᴘʀᴏғɪᴛs ᴏɴ ᴡʜɪᴄʜ ᴛʜᴇʏ ᴘᴀʏ ᴛᴀx ᴛᴏ ᴛʜᴇ ɢᴏᴠᴇʀɴᴍᴇɴᴛ ɪɴ ᴛʜᴇ ʜᴏsᴛ ᴄᴏᴜɴᴛʀʏ.
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The potential drawbacks of MNCs on host countries include: Domestic businesses may not be able to compete with MNCs and some will fail. ... MNCs may make use of transfer pricing and other tax avoidance measures to significant reduce the profits on which they pay tax to the government in the host country.
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