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
Related Geography A Level answers
All answers ▸How can membership of IGO’s gives some countries political and economic power?
Why reduce energy demand and what can be done to reduce it?
What factors affect the demand for a resource?
Evaluate how plate tectonics theory helps our understanding of the distribution of seismic and volcanic events.