Multinational corporations

Question 1

Effects of MNC’s

Answer 1

The decisions of MNCs can have major impacts on the demographic, social and economic characteristics of places. For example, Detroit in the USA was a major global centre of car manufacturing in the early and mid 20th century, with MNCs such as Ford, General Motors and Chrysler all located there.

Question 2

Flows of money

Answer 2

The investment from the MNCs gave the city a massive economic boost - large numbers of jobs were created, many of which offered comparatively high wages.

Question 3

Relocation

Answer 3

This altered the demographic characteristics of the city by attracting large numbers of migrants, both from the USA and other parts of the world - the population grew to a peak of around 1.8 million in the 1950s. After the 1950s, many of the manufacturing MNCs closed or relocated factories to places with cheaper
labour, such as Mexico.

Question 4

These decisions had a number of effects:

Answer 4

Massive population decline the population of Detroit at the 2010 census had reduced to around 700 000.
Huge reductions in employment - at the 2010 census, 24.8% of the workforce in Detroit was unemployed.
Social deprivation - Detroit has some of the highest crime rates in the USA.