INTRODUCTION
A multinational corporation is a company that has
subsidiaries in several countries. Their decentralized structure, as
well as their degree size, often allows them to overstep governmental
constraints which smaller regional or national companies must observe.
Developing nations attracts multinational subsidiary operations due
to a number factors such as cheap labour, low taxation and less
vigilance concerning workers rights and environmental protection. They
are made to contribute to the social security net (i.e. welfare,
unemployment insurance, e.t.c) other factors including low pay for
woman workers, child labour, and the absence of labour unions, also
combine to make the third world ripe for exploitation. The presence of
multination in these countries improves overall living standards. The
benefits of the relationship are most often one sided, but the
economic problems facing these nations makes it difficult for them to be
picky about their investor. Firms become multinational corporations
when they perceive advantages to establishing production and other
activities in foreign locations. Firms globalize their activities in
foreign locations. Firms globalize their activities both to supply
their home country market move cheaply and to serve foreign markets more
directly. Keeping foreign activities within the corporate structure
lets firms avoid cost inherent in arms length dealings with separated
entities while utilizing their own firm specific knowledge such as
advanced production techniques. By internalizing what would otherwise
by cross-boarder transaction multinationals can bridge the information
obstacles that often hinder trade. For example, they may be able to
move carefully monitor product quality or worker conditions in
factories they own than in those of contractors, or adapt the
composition of output more quickly to change in market condition.
Improvements in information technology have reduced the impediments
to exerting corporation control across boarders. These advances have
combined in recent years with an increased openness on the part of
government to foreign multination, as the economic benefits of a
foreign presence to the host country have become more widely
recognized. These benefits include the increased investment and the
associated jobs and income that the multinational firm brings, as well
as technological transfer and improved productivity. The role of
multinationals in spreading industry best practices is likely to be
especially important services, many of which are not easily traded
across national boundaries.
Evidence of the heightened role of multinationals can be seen in
the quickened pace of Foreign Direct Investment (FDI) in recent years
in 1991 FDI flows both in and out of other European country development
(OECD), reached regard level; over 2.5 percent (%) of their combined
gross domestic product (GDP) for in flow and 3.0 percent for outflow.
Most of foreign direct investment is between developed countries, since
1982, 75% (percent) of FDI out flow from OECD countries have gone to
other OECD members.
SOURCE: United Nation Multinational Corporation in world development New York (2000).
1.1 OBJECTIVE OF THE STUDY
The main objective of this study is to critically look into the
activities of those multinational corporation in their host nations
mostly developing nations if their existence has positive or negative
impact on the development of the host country.
The following were the significance of this study: -
- It will be a source of knowledge expansion to me
- This research work will be my contribution to knowledge.
- It will serve as source of data for others who may carryout research work on some or related topic in the future.
- It will also serve as point of reference to policy makers in their relationship with matter concerning multinationals.
- This research work will be a companion to decision makers on
foreign investment in the country. Mostly when the fire of foreign
investment is at higher level in the country.
- SCOPE OF THE STUDY
The essay work will cover the following areas of
study in terms of the activities of multinational corporation, their
roles as an agent of the development, their contribution towards
development, the prose and coin i.e. advantage and disadvantages of
their activities. It will also examine their negativity in the area of
profit send to their home ration.
Due to the following constraints such as
inadequate books or the topic posed a serious constraint on the write
up some of the date needed for this write-up are not available at the
time this write up services carious out.
It is prominent to note that no one has every thing to himself. In
everything, there arises some constraints, so it is in the case of
this essay
- Financial problem; This problem is a great
one especially in this present day economy recess in with inflation,
sky rocketed prices of materials, where people are struggling to live
within their limited resources. This is especially applicable to a
student who depends largely on others, among lost is that of
transportation to and fro, the place of research, in some cases would
have to trek for long distance.
- Time: Time factor is another constraint,
which the writer encountered. Such as combining class activities i.e.
test, assignments, lectures and exams with the project work other
include the drudging of read and writing from one item to another in
the attempt to accomplish the task.