The role of Multinational Corporations in Developing Economies Essay

The role of Multinational Corporations in Developing Economies - Essay modelOn the other hand, Maheshwari (2006, p.53) generally postulates six characteristics of a multinational corporation (1) operates and carries direct investment to several(prenominal) nation-states (2) formulates and maintains an industrial organization (3) widely functions on the basis of globally owned assets (4) largely transfers capital, goods, and services from groundwork to host countries (5) transfers resources but does not trade such resources and (6) manages not its local subsidiaries but the nationals or tidy sum from the host country. Maheshwari (2006, p.52) notably provides several examples of MNCs such as Goodyear, Pepsi, and Nestle Corporations. These multinational corporations function and operate in numerous nation-states -- particularly those so-called Third World nations such as Indonesia -- as their host countries. many a(prenominal) of the MNCs home countries atomic number 18 highly indu strialized nations of which the United States is highly prominent.Multinational corporation essentially originates from a humble beginning, so to speak firms. When firms firmly decide to ferment multinational corporations, there are necessary factors that they systematically fill-up or comply to. Maheshwari (2006, p.53) strongly argues that the underlying reason why certain firms become multinational corporations is because of their desire for vertical expansion. It implies that these firms wanted to substantially expand their business enterprise from production towards distribution. In setting up subsidiaries in other nation-states, these firms -- which ultimately become multinational corporations -- greatly endeavor both to accumulate raw materials from the resources of their host countries or to acquire global markets for the distribution or sale of their capital, goods, and/or services (Maheshwari, 2006).First, firms pursue an expansion business in order to acquire raw mater ials from the countries whose natural resources are exceedingly abundant. Normally, these firms are