Some developing countries invite large foreign companies to open offices and factories in order to help their economy. However, others feel that foreign companies should be shut out and instead, the government should help the local companies to contribute to economic growth. To what extent do you agree or disagree?
It is a highly debatable issue whether multinational companies (MNCs) should be encouraged by It is a highly debatable issue whether multinational companies (MNCs) should be encouraged by the governments of developing countries, or whether local companies should be promoted. I firmly believe that MNCs are good for economic growth. Therefore, I disagree with the given statement that MNCs should be shut out. A number of arguments surround my opinion.
There are many advantages of MNCs. To begin with, these provide employment, which usually pays better than other available opportunities. What is more, they train local labour with more sophisticated techniques, which in the long run bring benefits to the host country. They also raise the growth rate of the host nation by introducing new investments and new technology. To add to it, they promote efficient production and bring a broader range of products to the widest possible market.
Furthermore, such MNCs promote the improvement or development of various supporting industries or complementary industries. For example, if an MNC opens in a place, then many businesses open in the neighbourhood, which cater to the workers working in these MNCs. In this way, these MNCs stabilize and stimulate local economies, and raise standards of living.
Another important advantage of MNCs is that they induce their local rivals to become more innovative and competitive. For instance, it is a well-known fact that the Indian company Videocon has improved its standards to compete with MNCs such as Samsung and Sony. Finally, these companies promote positive values, such as diversity, and equality for women. They also create an environment of nonviolence and international cooperation.
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To conclude, MNCs may have their negative points, but their pros far outweigh their cons. So, they should be promoted by the governments of developing countries.