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There have been many barriers in the success of theMNC but they have managed to set back - Essay Example

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International business - draw on theory and evidence assess the extend which multinational firms are a 'force for progress Contents Introduction 3 Body 4 Conclusion 12 Reference 13 Introduction In the process of globalization, multinationals have been the compelling point…
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There have been many barriers in the success of theMNC but they have managed to set back
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There have been many barriers in the success of theMNC but they have managed to set back

Download file to see previous pages... Changes in the policies and economic system in the developing countries have lead to a shift the way governments had perceived their interest. Hence there has been a wide range of attitudes of government towards the multinationals. Economic globalization has lead to the widening and extent of international transactions. One of the consequences of globalization is the growing convergence of the level of income, consumption pattern and also institutional structure among the industrialized countries and developing countries. To most important determinants of globalization includes fast and extensive implementation of new technologies mainly computer technologies and information, organizational cost and also cross border communications and secondly, liberalization of domestic and also of international markets. But it can also be said that globalization has not affected all the countries and also regions in some way or the other. It has resulted in widening the assets and also income gaps between the developing countries and industrialized countries (Dunning & Narula, 2004, p.39). The globalization has emerged as one of the going concern and has forced the multinationals to excel in its respective industry by way of expansion and creating a brand name all over the globe. Body Growth of Multinationals Post war period has witnessed the unprecedented and sustained growth in the multinational corporations. There has been a growth of international business which has been financed by the foreign direct investment (FDI) which further has been accompanied by variety in its source of geographical distribution (Tolentino & Tolentino, 2004, p.1). The subject that has raised maximum interest in relation to the promising economies is the rise of multinationals. The framework which is designed to explain the growth of multinationals are hence not adequate enough to understand the growth of emerging multinationals as in today’s date (Dolfsma, et.al, 2009, p.146). With the expansion of world economy it promoted a recovery in the rate of FDI in the global scenario. By the year 1960, the global stock of FDI has reached about $60 billion and by 1980 it stood at about $500billion. It was during these decades that the term multinational were invented and the economic theorist has turned their attention in explaining the existence of international firms. During 1960’s US have accounted nearly 85% of all new FDIs flows. By 1980 it held about 40% of the stock in total. Today the German have managed to surpass Netherland. In 1980 there was no multinational investment made in neither China nor India and Japan accounted for only 1% of the FDI stock. 1980 was the phase when globalization got intensified. Japan share of manufacturing increased from merely 55 to about 20% thirty years later the inception of globalization. The most striking changes took place with the emerging countries. Multinationals were seen as a means to develop new products, technologies and also skills. Chain adopted the market oriented policy is an example of starting point of new global economy. Deregulation and also privatization has further opened up new opportunities with respect to globalization and includes services such as tourism, transport, telecommunications and other services. Multinational faces risk of expropriation but the rules of international property ...Download file to see next pagesRead More
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