What are the various ways in which MNCs set up, or control, production in other countries?
The most common strategy of a Multi National Corporation is to first buy a local company and then to expand production.
Depending on the product MNCs adopt another strategy also. In labour intensive products like garments and footwear, MNCs place huge orders from developing nations, and then sell these under their own brand names to the customers.
MNCs are spreading their production and interacting with local producers in various countries across the globe.
1. MNCs are setting up partnerships with local companies.
2. MNCs are using the local companies for supply of raw material or accessories.
3. MNCs are closely competing with the local companies.
4. MNCs are taking over local companies with their immense money power.
Thus MNCs are exerting a strong influence on production at distant locations.
What are the various ways in which MNCs set up, or control, production in other countries?
How has liberalisation of trade and investment policies helped the globalisation process?
What was the reasons for putting barriers to foreign trade and foreign investment by the Indian government? Why did it wish to remove these barriers?
Why do developed countries want developing countries to liberalise their trade and investment? What do you think should the developing countries demand in return?
How does foreign trade lead to integration of markets across countries? Explain with an example other than those given here.