Economics(Paper-4) - Shivaji University

III) Advantages of Multi-national Corporations :
Generally developing countries have to depend on MNC’s. The main benefits of
the MNC’s are as follows.
1) Capital and Technology :
The developing country face the acute shortage of capital as well as technology,
this can be met with the MNC’s with their operational and management. The capital
intensive technology can be drawn through the MNC’s. Thus, it is very important
advantage to the receiving countries.
2) Rabid Industrialization :
The MNC’s provide better environment for the rapid industrialization in receipient
country through the cheap foreign capital and new technology.
3) Expolitation of Domestic Resources :
The operation of the MNC’s in developing countries like India and others, enabled
them to exploit their domestic resources and increase productivity in the exploration of
new resources. Further, they help the developing economies to integrate with the global
economy.
4) Space for International Market and Export Promotion :
The MNC’s produce commodities and services in a huge quantity with better quality,
which help to recipient country to capture domestic as well as international market.
This results in increased size of export.
5) Large scale employment :
Along with increase in savings, investment and production in developing and
underdeveloped countries, the MNC’s presents the opportunity of enhancing employment
on a large scale.
6) Foreign exchange Reserves :
MNC’s plays a vital role in meeting the deficit and increasing foreign exchange
reserves in under developed and developing countries by increasing their export both
of semi finished and finished products.
7) Infrastructures :
MNC’s assist in the development of infrastructural facilities in recipient countries,
which help in the development of other sectors of the economy, such as, agriculture,
mining trade, commerce and other related activities.
8) Increase in the standard of living :
Multinational corporations spend huge funds on research and development (R &
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