Why do MNCs set up joint ventures ?
Answers
Answer:
(i) MNCs can provide money for additional investments, like buying new machines for faster production.
ii) MNCs might bring with them the latest technology for production.
(iii) MNCs also buy some local companies to expand production, since they have wealth exceeding the entire budgets of the developing countries.
they set up ventures for entrepreneurship, connectivity and interpersonality...
Okay, so I got the answer after reading the chapter for about 20 - 30 times :'( -
Answer -
MNCs set up joint ventures with some of the local companies in the middle of the twentieth century.
What crossed the boundaries of the countries at the twentieth century were raw material, food stuff and finished products. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries.
These were the reasons why MNCs set up Joint ventures.
Explanation -
Pg - 56
Until the middle of the twentieth century, production was largely organised within countries. What crossed the boundaries of these countries were raw material, food stuff and finished products. Colonies such as India exported raw materials and food stuff and imported finished goods. Trade was the main channel connecting distant countries. This was before large companies called multinational corporations (MNCs) emerged on the scene. A MNC is a company that owns or controls production in more than one nation.
Pg - 57
At times, MNCs set up production jointly with some of the local companies of these countries. The benefit to the local company of such joint production is two-fold.
So yeah, MNC did set up joints ventures in the Mid - 20th century :')