USA, Japan and major economic forces of the countries of Western Europe, developed countries, infrastructure and well-functioning financial markets facilitate the operation and potential success of multinational corporations (MNCs). The largest number of TNCs based in the US, many of these companies are among the fortune Global 500.
What are the benefits received by MNCs in these countries?
MNCs rely on infrastructure, both hard and soft, to create and maintain a healthy business environment in any place. These infrastructures are closely interrelated, and the impact on politics and the economy. MNCs view their presence as promoting trade indicators that are required for investing and doing business in this country.
USA, Western Europe and Japan-they all have highly developed soft infrastructure and financial markets that allow companies located there to raise large amounts of money at low cost. The presence of advanced technology and modern management techniques is also a huge advantage for these companies.
Soft infrastructure includes human capital, talent, training, and support institutions such as colleges and universities that will help to produce competent staff. The sound of soft infrastructure also contains administrative, judicial and law enforcement agencies that protect political and social stability necessary for effective entrepreneurship, and grow and pass specialized services to people.
The lack of soft infrastructure means that there are institutional voids, such as the lack of regulatory systems, specialized intermediaries, educational institutions, talent and training. This makes it difficult for new corporations based in developing countries to access inexpensive human capital or talent, and he is no less of a challenge for MNCs wishing to do business in such countries.
Hard infrastructure is another reason why most transnational corporations based in the US, Western Europe and Japan. It consists of roads, bridges, ports, buildings and structures that fall under the heading of public works. Because hard infrastructure, impact of transport, its absence negatively affects the capacity of the supply chain and the ability of MNK to the physical movement of materials and goods from place to place.
Though MNCs have long avoided developing countries, globalization and new possibilities to initiate the creation of infrastructure finds them more likely to embrace the challenge. The promise of getting a huge tax revenue forces governments in developing countries to entice TNCs to do business in their territories.
In addition to providing the company with MNCs to create jobs, stimulate local economy, and create and share culture. They also introduce previously unavailable goods and services, advanced technology and management methods. Then the local MNCs can use these advantages to become more competitive and create their own opportunities for doing business beyond national borders.
Although the U.S. still boasts the largest number of MNCs compared to other countries, the share of the largest TNCs have the headquarters have decreased over the years. 60 percent of the world’s top 500 TNCs based in the US in 1962. By 1999, this figure dropped to 36 percent.