What are the contributions of multinational corporations towards the globalization?

Abstract:

Emphasizes the profound implications for the global economy from the business decisions of multinational corporations [MNCs], firms that conduct direct business activities and own assets in at least two countries. The production and business strategies developed by MNCs to fragment, outsource, and offshore various activities gave rise to global value chains [GVCs]. MNCs and their affiliates contributed 36 percent of global output in 2016, including about two-thirds of global exports and more than half of imports; their contribution has been especially pronounced in knowledge-intensive goods, knowledge-intensive services, and regional processing sectors. Three objectives dominate the production decisions of MNCs, including lowering production costs, mitigating risks, and increasing market power. The business strategies MNCs use to pursue each of their objectives are intertwined with the structural characteristics of the specific GVCs they operate within; MNCs organize their production networks using the three main modes of foreign direct investment [FDI], non-equity modes [NEMs], and arm’s length trade.

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What are the contributions of multinational corporations?

What is the contribution of MNCs towards the development of developing countries?