Multinational Corporations
Multinational Corporations (MNC's) are an integral field of study in International Political Economy (IPE) due to its economical and political powers excered in the global market. An MNC is a cooperation that has a home base along with foreign locations abroad where they practice their productivity through foreign direct investment (FDI). there is a specific relation between the home and foreign locations of the cooperation; for example most MNC's are home based in the United States, Japan or Europe, while foreign locations are strategically in Developing or Less developed countries (LDC). This distinctive North- South, rich-poor, home-foreign relationship that MNC's have created in the past few decades have been subjected to debates on its political and economical effects in the world.
Because of the large wealth these corporations accumulate, they in some cases have expenditure equal or higher than a small country’s GDP. This also gives them an economical leverage in both home and foreign markets. MNC's are generally perceived as negative agents by economic nationalists onto their foreign presence. The argument is that LDC competes for Multinational corporations' foreign direct investment which may stimulate their economies, but though this competition amongst nations, we can observe a decrease in environmental regulations, deterioration of workers’ rights, and the establishment of a dependency relation between the MNC and its host country. The reason MNCs are attracted to foreign markets often include, cheap labor, lower taxes, less governmental intervention and market specialization. In order to retain control of a market, MNC's have been witnessed to practice lobbying and acquire considerable political power within a state. The increase of power is a direct challenge to the internal political stability of the countries they occupy and threaten their sovereignty as well.
Thanks to neo-liberal policies since the 70's, the numbers of MNC’s have multiplied
Because of the large wealth these corporations accumulate, they in some cases have expenditure equal or higher than a small country’s GDP. This also gives them an economical leverage in both home and foreign markets. MNC's are generally perceived as negative agents by economic nationalists onto their foreign presence. The argument is that LDC competes for Multinational corporations' foreign direct investment which may stimulate their economies, but though this competition amongst nations, we can observe a decrease in environmental regulations, deterioration of workers’ rights, and the establishment of a dependency relation between the MNC and its host country. The reason MNCs are attracted to foreign markets often include, cheap labor, lower taxes, less governmental intervention and market specialization. In order to retain control of a market, MNC's have been witnessed to practice lobbying and acquire considerable political power within a state. The increase of power is a direct challenge to the internal political stability of the countries they occupy and threaten their sovereignty as well.
Thanks to neo-liberal policies since the 70's, the numbers of MNC’s have multiplied