MNC's And FDI Flashcards
0
Q
World wide companies..
A
Through their activities provide FDI to the companies they choose to operate in
1
Q
MNC’s are…
A
Firms that operate in more than one country
2
Q
This investment is necessary to…
A
Produce or sell a good or service in a foreign country
3
Q
Benefits of FDI
A
- an injection into the circular flow of income
- multiplier effect and job creation
- effects BOP
- increase in tax revenue for gov
- improved productivity
- technology transfer
- infrastructure improvement
4
Q
Risks of FDI
A
- short term employment
- small employment- due to employing people from own country
- MNC’s enjoy labour saving technology
- effects of BoP less than expected
- taxes received less than expected
- productivity gains and technology transfer limited
- environmental costs
5
Q
Other financial flows
A
Hot money
Foreign Aid
Remittances
