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What are the effects of TNCs is both the countries they operate in and their home countries?

Countries they operate in

+ Provide employment opportunities in developing nations - Coca-Cola factory in Egypt employs 12000 people and created 120000 indirect jobs

+ Help developing nations enter the global market through FDI - Coca-Cola $1.5bn in Brazil and $1.5bn in Russia

+ Bring communities closer as factories in rural parts of the country may employ the majority of the surrounding towns' people.

- Harm ecosystems for the sake of profit - Coca-Cola factory in Kerala, India shut down due to contamination of local water sources

- Exploit cheap labour - poor conditions recorded in Foxconn factories (Apple's manufacturing partner) in China, such as poisoning via LCD screen cleaner.

Home country

+ By outsourcing big business, leaves more space for local businesses to thrive and grow.

+ Countries which the TNC operates in will more easily become trading partners

- Tax avoidance (e.g Amazon) by basing company headquarters elsewhere.

- Fewer jobs in home nation due to outsourcing of labour - Dyson moved their main factory to Malaysia, 800 workers lost jobs

Luis D. Mentoring Maths tutor, GCSE Maths tutor, Mentoring Geography ...

2 years ago

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