Adnatages and Disadvantages of Tnc's

Topics: Developing country, Economics, Developed country Pages: 4 (834 words) Published: January 22, 2013
Advantages and Disadvantages of TNCs
Sort the following statements into the following sets

- Advantages of the presence of TNCs in a global market-place - Disadvantages of the presence of TNCs in a global market-place - Effects on country of origin
- Effects on host country
- Social factors
- Environmental factors
- Economic factors

Use the statements to help you construct an answer to the following essay questions;

“TNCs have had a positive impact on the level of development in both developed and developing countries. Discuss.”

“TNCs have proved socially, economically and environmentally destructive in both developed and developing countries. Discuss.”

|Advantages of TNCs |Disadvantages of TNCs |Effects on country of origin | |Effects on host country |Social factors |Environmental factors | |Economic factors | | |

TNCs help develop mineral wealth in countries that might not otherwise be able to capitalise on local resources

Positive multiplier effect usually means that the presence of TNCs in a country improves roads, airports and services

Outsourcing means that TNCs exploit cheap labour. As a result local workers are paid badly

Profits don’t generally remain within the country in which goods are manufactured

TNCs are footloose and may move their operations out of a country at any point – in search of lower wages and cheaper production elsewhere. This creates economic uncertainty within the host country

Because they are transnational TNCs can avoid paying full taxes in the countries where they operate. This affects the services...
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