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reasons for globalization - Coggle Diagram

- - - - it helps big companies compete and become even bigger.
    - - Large companies invest overseas to secure resources, particularly in the mining industry. Many African states have attracted foreign direct investment (FDI) due to their reserves of valuable resources. The French oil company Total invested $16 billion in an oil extraction project off the coast of Angola. Additionally, countries like the UK import a significant amount of food from overseas to meet the needs of their population, highlighting the need for access to natural resources abroad.
    - - As the global economy grows, more companies are expected to target overseas markets to increase their profits, revenues, and returns to shareholders.
  - - - Multinational corporations (MNCs) often repatriate their profits from foreign countries back to their home country. Unfortunately, this means that the host country where the profits were made loses out on potential benefits such as increased tax revenue and job creation. As a result, it appears that MNCs bring more advantages to developed countries where their headquarters are based rather than less developed countries.
    - - According to a report by the United Nations, the damage caused by the world's biggest companies to the natural environment could wipe out more than one-third of their profits if they were held responsible for the costs, amounting to around US$2.2 trillion. The environmental impact of businesses is a significant concern.
    - - This is a problem because if companies can avoid paying taxes in developed countries, they can also do it in poor countries.
  - - - Owing to the attractiveness of MNCs/FDI, governments are more likely to invest in infrastructure in order to attract the attention of investors. If this investment is forthcoming, everyone will benefit.
    - - MNCs provide training and work experience for workers when they locate operations in foreign countries. Also, governments in less developed countries often spend more on education to help attract MNCs. The arrival of MNCs will help to boost the stock of capital in host countries. One reason is because when a business sets up a new facility, such as a factory, it is likely to install up-to-date technology.
    - - One of the main benefits of FDI is the employment created when MNCs arrive and establish factories, warehouses, shops and other business facilities. When MNCs set up operations overseas, income in those countries rises. Local suppliers are also likely to get work when a multinational arrives.
    - - The profits made by MNCs are taxed by the host nation. This increases tax revenue for the government that can be used to improve government services.