Negative effects host country developing countries mncs

Volume 41OctoberPages Foreign direct investment, exports and economic growth: The article applied the autoregressive distributed lag model, known as the ARDL bounds testing approach to cointegration for the long run relationship between economic growth, foreign direct investment and exports. The error correction model was used to examine the short run dynamics; and the VECM Granger causality approach was used to investigate the direction of causality. The article confirmed cointegration between economic growth, foreign direct investment and exports.

Negative effects host country developing countries mncs

Though MNCs confer several benefits on the developing countries, they also create some problems for them. The more prominent amongst them can be described as follow: Disturbing the plan priorities The MNCs are profit oriented.

They show a strong tendency to take up the production of those commodities in which they can earn a high profit margin. They ignore the production of more important commodities if they do not give them the required profit margin. This results into the allocation of resources to the production of low priority goods.

The local producers also show a tendency to enter into the low priority industries if they are more profit earning. Inappropriate technology The MNCs are accustomed to use a particular type of technology which is suitable for conditions in developed countries.

They bring that technology to the developing countries, but that technology is not suitable for the developing countries.

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There is excessive supply of labor in developing countries. The technology introduced by MNCs is not proper for absorbing labor. It aggravates the problem of unemployment. Excessive profits Most of the MNCs earn excessive profit by selling their products at very high prices.

A large part of the profit is sent by the MNCs to their home countries. The host country has to provide foreign exchange to the MNCs to enable them to remit the profit to the Home country. Over exploitation of resources The aim of an MNC is to maximize profit in shortest possible period.

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They do not care for the long run effects of their activities. They do not care to renew or replace the used resources.

Negative effects host country developing countries mncs

Indifference to social cost The MNCs are not very particular about controlling the social costs like pollution or loss of life in the event of an accident. They are careless in maintaining the required safety measure.

They interfere in the administration of the developing countries. The possible adverse effects of their working can be controlled by suitable action.Population by region. Six of the Earth's seven continents are permanently inhabited on a large scale.

Asia is the most populous continent, with its billion inhabitants accounting for 60% of the world population.

The world's two most populated countries, China and India, together constitute about 36% of the world's population.

Africa is the second most populated continent, with around Published: Mon, 5 Dec Foreign direct investment (FDI) is an activity in which an investor resident in one country has a lasting interest in, and a large influence on the management of an entity resident in another country (OECD, ).

Population by region. Six of the Earth's seven continents are permanently inhabited on a large scale. Asia is the most populous continent, with its billion inhabitants accounting for 60% of the world population.

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The world's two most populated countries, China and India, together constitute about 36% of the world's population. Africa is the . International Journal of Academic Research in Business and Social Sciences April , Vol. 3, No. 4 ISSN: The rest of the paper is structured as follows after the introduction.

CHAPTER 1: INTRODUCTION Overview Foreign direct investment (FDI) is an activity in which an investor resident in one country has a lasting. alphabetnyc.com is the place to go to get the answers you need and to ask the questions you want.

Harmful Effects of MNCs on developing countries | alphabetnyc.com