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Impact of multinational companies on the host countries - Coggle Diagram
Impact of multinational companies on the host countries
Advantages
Economic growth
Boost domestic economy by providing employment, developing local network of suppliers, and paying taxes and providing capital injections.
New ideas
Introduce new ways of doing business and new ways of interacting socially.
Skills transfer
Help develop the skills of local employees.
Domestic businesses can benefit from starting their own business with skills learned.
Greater choice of products
Domestic market will benefit as variety of products increase.
Short-term infrastructure projects
Help to build infrastructure.
Disadvantages
Profits being repatriated
Pay into the local tax system, but bulk of their profits will be rerouted away from host country.
Loss of cultural identity
Appeal of domestic products, ways of doing business, and cultural norms suffer.
Special younger generations who are more likely to buy global brands.
Braid drain
Highly skilled employees look to work for the multinational company, domestic in another country.
Loss of market share
Take over more of domestic market, domestic producers may suffer.
Short-term plans
Not intend to stay for a long time - if lower-cosy producer can be found elsewhere, they may move out at short notice.