Multinationals (Quick Revision) Flashcards
Define: Multinationals
Multinationals are firms that produce in more than one country.
State two reasons why a firm might become a multinational.
- To overcome protectionism
* To benefit from the resources of each country or from government incentives
State three reasons why a government might welcome a multinational firm.
- Brings jobs
- Brings tax revenue
- Brings skills and technology
State two reasons why a government might be suspicious of multinational firms.
- Exploitation of local resources
* Power of multinational firms
State one disadvantage of being a multinational firm.
• May be more difficult to administer and manage.
What is the Examiner’s note for Multinationals?
Markets are becoming increasingly globalised, with greater and easier access to markets. This has encouraged the growth of multinational firms.
What is the Evaluation point for Multinationals?
A firm is likely to become a multinational if it trades in many markets, if being close to the customer is important in each market, if countries have different resources to offer and if being based abroad overcomes protectionism.
